News

25 Feb, 2014


RATE OF EXCHANGE OF ONE UNIT OF FOREIGN CURRENCY EQUIVALENT TO INDIAN RUPEES

  with effect from 21th Feb, 2014 be the rate mentioned against it in the corresponding entry in column (3) thereof, for the purpose of the Section 14  of the Customs Act, relating to imported and export goods. 

 

S. No.

Foreign Currency

Rate of exchange of one unit of foreign currency equivalent to Indian rupees

(1)

(2)

(3)

 

 

(a)

(b)

 

 

(For Imported Goods)

(For Exported Goods)

1.

Australian Dollar

56.65

55.15

2.

Bahrain Dinar

170.40

161.05

3.

Canadian Dollar

57.10

55.70

4.

Danish Kroner

11.70

11.35

5.

EURO

86.85

84.85

6.

Hong Kong Dollar

8.10

8.00

8.

Kuwait Dinar

228.40

215.30

9.

New Zealand Dollar

52.25

50.95

10.

Norwegian Kroner

10.45

10.15

11.

Pound Sterling

105.30

103.00

12.

Singapore Dollar

49.95

48.75

13.

South Africa Rand

5.85

5.45

14.

Saudi Arabian Riyal

17.15

16.20

15.

Swedish Kroner

9.75

9.45

16.

Swiss Franc

71.35

69.40

17.

UAE Dirham

17.50

16.55

18.

US Dollar

62.95

61.95

S. No.

Foreign Currency

Rate of exchange of 100 units of foreign currency equivalent to Indian rupees

(1)

(2)

(3)

 

 

(a)

(b)

 

 

(For Imported Goods)

(For Exported Goods)

1.

Japanese Yen

62.00

60.50

2.

Kenya Shilling

74.70

70.35

 

 
Attachment:  1393391792.pdf
 

13 Feb, 2014


LEVY OF CENTRAL EXCISE ON BRANDED PRODUCTS

 LEVY OF CENTRAL EXCISE ON BRANDED PRODUCTS

 

 

CESTAT, Mumbai Bench, has recently delivered a judgment wherein it was held that Footwear, which is notified in the Third Schedule of the Central Excise Tariff Act 1985, were received in loose jute bags from Karigars and are then packed in boxes wherein details like MRP, logo and monogram are affixed on it, then such activity amounts to manufacturing under Section 2(f)(iii) of Central Excise Act 1944.

 

Full judgment is enclosed.

 
Attachment:  1392294872.docx
 

10 Feb, 2014


SERVICE TAX PAYABLE ON TOTAL AMOUNT

 SERVICE TAX PAYABLE ON TOTAL AMOUNT

 

CESTAT, Mumbai Bench, has recently delivered a judgment wherein it was held that were the service provider provides any security guards and receives wages amount being payable to the security guard as well as his commission from the service recipient, then service tax is payable on total amount i.e. wages amount and the commission amount combined. It was held that wages amount paid by the service recipient cannot be said to be reimbursement of expenses to the service provider.

 

Full judgment is enclosed.

 
Attachment:  1392096860.docx
 

10 Feb, 2014


NO EXCISE DUTY

CESTAT, Mumbai Bench, has recently delivered a judgment wherein it was held that were packing materials are re used and after certain period of time, they are destroyed and sold as scrap, then it cannot be said that scrap has been manufactured and hence no excise duty is payable on sale of such scrapped packing material. It was further held that were the manufactured goods are kept in the laboratory for testing purpose under the guidelines of any statutory law and such sample are not sold, then no excise duty is payable on such manufactured goods kept as sample for testing.

 

Full judgment is enclosed.

 
Attachment:  1392033355.docx
 

06 Feb, 2014


CESTAT

CESTAT


CESTAT, New Delhi Bench, has recently delivered a judgment wherein it was held that were a manufacturer was affixing any sticker on the goods manufactured by it which specifies that the goods has been manufactured under Technical collaboration with some other company and also uses the logo of that other company, then the said manufacturer cannot avail the benefit of exemption given to small scale industries and shall be liable to pay duty on full turnover.

 

Full judgment is enclosed.

 

 
Attachment:  1391667048.docx
 

03 Feb, 2014


CENVAT CREDIT OF THE SERVICE TAX

 The manufacturer was paying royalty to its MD. During audit, the Excise dept authorities directed the MD to take registration under Service Tax and discharge the liability of service tax on the royalty income. The MD complied with the same.

 

 

Subsequently, the manufacturer availed the CENVAT credit of the service tax paid on royalty to the MD. The Excise dept disallowed the CENVAT credit and levied duty, interest and penalty on the manufacturer.

 

Hon’ble CESTAT, Mumbai Bench, on the appeal filed by the manufacturer, set aside the order passed by the Chief Commissioner, Central Excise, Mumbai II and held that the order is not sustainable in law.

 

Full judgment is annexed

 

 
Attachment:  1391418139.docx
 

17 Jan, 2014


NO DEDUCTION OF TDS ON SERVICE TAX COMPONENT

 
Attachment:  1389959157.pdf
 

31 Aug, 2013


SERVICE TAX RETURN DATE EXTENDED

 SERVICE TAX RETURN DATE EXTENDED

 

 

The Service Tax Department has issued a order No. 04/2013, dt 30.08.2013 whereby it has extended the last date of filing of ST-3 Return for the period October, 2012 - March,2013 from 31st August, 2013 till 10th September, 2013. 

https://mail.google.com/mail/u/2/images/cleardot.gif

 

The relevant order is enclosed.

 

 

 
Attachment:  1377925292.pdf
 

27 Aug, 2013


DP-1 FORM DATE EXTENDED

  DP-1 FORM DATE EXTENDED

 

The Delhi Value Added tax Department has issued a notification dt. 26.08.2013 whereby it has extend the last date for filing DP-1 Form. It has been prescribed that DP 1 shall be submitted online by all the dealers latest by 16.09.2013.

https://mail.google.com/mail/u/1/images/cleardot.gif

 

The relevant notification is attached. 

  

 
Attachment:  1377580574.jpg
 

24 Aug, 2013


CENTRAL STATUTORY FORMS

 CENTRAL STATUTORY FORMS

 

 

The Delhi Value Added Tax Department has issued a circular dt. 23.08.2013, whereby it has prescribed process for obtaining Central Statutory Forms for the year 2011-12 & before.

As per the captioned circular, henceforth Central Statutory Forms will not be issued manually for the year 2011-12 & before. All the Central Statutory Forms has to be obtained electronically.

The relevant circular is attached.

 
Attachment:  1377338981.jpg
 

24 Aug, 2013


SUBMISSION OF HARD COPY OF DVAT RETURN

 Submission of hard copy of DVAT RETURN

 

 

 

The Delhi Value Added tax Department has issued a circular dt.22.08.2013 whereby the hard copy of the quarterly returns filed on line in electronic form for the quarter ending 30.06.2013 (Refund as well Non- Refund) will be accepted at the especially set up Front Office Extension Counters on the respective floors on29.08.201330.08.2013 & 31.08.2013.

 

The relevant circular is attached. 

  

 
Attachment:  1377335245.jpg
 

22 Aug, 2013


EXEMPTION FROM EXCISE DUTY LIABILITY

 EXEMPTION FROM EXCISE DUTY LIABILITY

 

 

The Central Government has issued a notification no. 10/ 2013 dt. 2nd Aug 2013 where by it has exempted packing material like Plastic Container, Plastic Bottles, cartoons of paper and paper board, metal containers, crown cork, pilfer proof caps and certain other packaging products from levy of excise duty.

 

The exemption has been granted for the period  16th June 2003 to 26th Feb 2010 ( for plastic containers and plastic bottles ) and for the period 16th June 2003 to 28th April 2010 for other packing material.

 

This exemption has been granted to those assessee who are availing the benefit of SSI exemption notification no. 8/2003 dt 1st March 2003 and manufactures the packing material which bears the brand name of other persons.

https://mail.google.com/mail/u/3/images/cleardot.gif

 

The relevant notification is attached herewith.

https://mail.google.com/mail/u/3/images/cleardot.gif 

 
Attachment:  1377168644.pdf
 

22 Aug, 2013


EXEMPTION FROM REGISTRATION

 EXEMPTION FROM REGISTRATION

 

 

 

The Central Government has issued a notification no. 11/2013 dt. 2nd Aug 2013 whereby it has exempted pharmaceutical companies from registration under Central Excise where such  unregistered premises are used solely for affixing a sticker or re-printing or re-labeling or re-packing of pharmaceutical  products falling under Chapter 30 of the First Schedule to the Central Excise Tariff Act, 1985 with lower ceiling price to comply with the notifications issued by the National Pharmaceutical Pricing Authority under Drugs (Prices Control) Order, 2013 published in the Gazette of India vide S.O. 1221 (E), dated the 15th May, 2013 subject to the conditions specified in the notification  no. 22/2013 - Central Excise dated the 29th July, 2013 exempting the pharmaceutical products from payment of Central Excise duty.

 

The relevant notification is attached herewith.

 
Attachment:  1377168603.pdf
 

22 Aug, 2013


VAT AUDIT

 VAT AUDIT

 

 

The Delhi, Value Added Tax Department has issued a circular dated 16.08.2013 whereby VATO had been asked to conduct audit for the dealers for the year 2009 – 10 to 2012 – 13.

 

The relevant circular is attached.

 
Attachment:  1377168553.jpg
 

22 Aug, 2013


STOCK STATEMENT DATE EXTENDED

 The Delhi, Value Added Tax Department has issued a Notification dt. 16.08.2013  extending the last date for filing of Stock Statement in Form Stock-1 online for the stock available on 31st March, 2013 till 16th Sept 2013.

 

 

Class of Dealers

Last date for filing of Stock Statement in Form Stock-1

Dealers having Gross Turnover (GTO) upto Rs.1.00 crore during the year 2012-13

16.09.2013

 

 

The relevant notification are attached.

 

 
Attachment:  1377168494.jpg
 

07 Aug, 2013


Filing of online DVAT returns & DVAT-48

 The Delhi, Value Added Tax Department has issued a circular dt. 06.08.2013  extending the last date for filing of Form DVAT return excluding Annexure 2C & 2D for the Qtr ending 30.06.2013 for dealers, including composition dealers  to 29.08.2013 and for submission of hard copy 31.08.2013.

 

The Last date of filing of return in DVAT 48 for the Qtr ending 30.06.2013 has been extended to 29.08.2013 and for submission of hard copy 31.08.2013.

 

The relevant circulars  are attached.

 

 
Attachment:  1375864128.jpg
 

07 Aug, 2013


FILING OF PAN AND IEC WITH VAT DEPT, DELHI

 The Delhi Value Added  Tax Department has made it mandatory for every dealers to inform Amendment in Business Activities u/s 21 and to declare the name of the manager, Permanent Account Number (PAN), Importer Exporter Code (IEC) u/s 95 of DVAT Act.

  

All the registered dealer’s are to furnish online dealer’s profile as on 31.03.2013 latest by 30.06.2013 in Form DP-1

 

 

 
Attachment:  1375853397.pdf
 

28 May, 2013


DVAT-51 DATE EXTENDED

 DVAT 51 DATE EXTENDED

 


The Department of Trade & Taxes has extended the date for filling of DVAT 51 for the period 2011-2012 along with Central Statutory Forms up to 10th June, 2013.

 
Attachment:  1369739346.pdf
 

21 May, 2013


CHANGE IN FORM T2CHANGE IN FORM T2

 CHANGE IN FORM T2

 

The Department of Trade & Taxes has issued a Notification on 17.05.2013, making some changes in Form T2.

The said Notification is being annexed.

 
Attachment:  1369138647.jpg
 

11 May, 2013


DVAT-51 DATE EXTENDED

 DVAT 51 DATE EXTENDED

 

The Department of Trade & Taxes has extended the date for filling of DVAT 51 for the period 2011-2012 along with Central Statutory Forms from 10th May, 2013 to 27th May, 2013.

 

The said Order is being annexed.

 
Attachment:  1368253685.pdf
 

11 May, 2013


AMENDMENT IN SERVICE TAX ON CONSTRUCTION, COMPLEX SERVICES

 AMENDMENT IN SERVICE TAX ON CONSTRUCTION, COMPLEX SERVICES

 

CBEC has amended Notification No.26/2012-ST dated 20.06.2012 with a view to remove the ambiguity prevailing on the rate of abatement of Service Tax on construction of residential unit.

 

Notification No.09/2013- ST dated 08.05.2013 has amended the rate of abatement in the case of construction of a complex, building, civil structure or a part thereof in the following manner:

 

(a) Service Tax has to be paid on 25% value of a residential unit if the following two conditions are fulfilled cumulatively:

(i)          The carpet area of the unit is less than 2000 square feet; and

(ii)         The amount charged for the unit is less than rupees one crore;

 

(b) In other cases, service tax will be paid on 30% of the value of a complex, building, civil structure.

 The abatement is subject to the following conditions:

(i)          CENVAT credit on inputs used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004;

(ii)         The value of land is included in the amount charged from the service receiver.

 
Attachment:  1368253638.pdf
 

04 May, 2013


FOREIGN EXCHANGE RATE UNDER CUSTOMS ACT PRESCRIBED

 FOREIGN EXCHANGE RATE UNDER CUSTOMS ACT PRESCRIBED   

 

 

The government vide Notification 52/2013 dt. 02.05.2013, has prescribed the Conversion Rate of each of the Foreign Currency. This Notification is valid from 03.05.2013.

 

The said notification is being annexed.  

 
Attachment:  1367650586.pdf
 

02 May, 2013


SUBMISSION OF HARDCOPY OF VAT RETURN

 SUBMISSION OF HARDCOPY OF VAT RETURN

  

The Delhi Value Added Tax Department has issued a circular on 30th April 2013 whereby they have prescribed the process of accepting the hard copy of the quarterly returns filed online for the quarter ended 31.03.2013

 

The said Circular is being annexed.  

 
Attachment:  1367489681.jpg
 

26 Apr, 2013


SALES TAX RETURN DATE EXTENDED

 SALES TAX RETURN DATE EXTENDED

  

The Delhi Value Added Tax Department has issued a circular on 25th April 2013whereby the last date for filing of Monthly VAT Return for the month of March, 2013 has been extended from 25th April 2013 to 01.05.2013.

The Circular has also extended the last date for filing VAT return for fourth quarter  of 2012-13 from 25th April 2013 to 06.05.2013, 10.05.2013 & 15.05.2013 based upon Net Tax Liability.

 

The said Circular is being annexed.    

 

 

 
Attachment:  1366956153.doc
 

20 Apr, 2013


FOREIGN EXCHANGE RATE UNDER CUSTOMS ACT PRESCRIBED

 FOREIGN EXCHANGE RATE UNDER CUSTOMS ACT PRESCRIBED   

 

The government vide Notification 40/2013 dt. 18.04.2013,has prescribed the Conversion Rate of each of the Foreign Currency. This Notification is valid from 19.04.2013.

 

The said notification is being annexed. 

 
Attachment:  1366435394.pdf
 

20 Apr, 2013


DOCUMENTS FOR ONLINE REGISTRATION

 DOCUMENTS FOR ONLINE REGISTRATION

 

 

The Delhi Value Added Tax  Department has issued a list of documents which are required for filling application for registration and procedure for online registration.

 

The Relevant circular enclosed.

 

 
Attachment:  1366435357.jpg
 

20 Apr, 2013


DVAT DEPARTMENT- NO SECURITY REQUIRED

 DVAT DEPARTMENT- NO SECURITY REQUIRED

 

 

The Delhi Value Added Tax  Department  herby direct that no security would be required to be furnished by such dealers, who apply for online registration with the Department up to 30th June 2013

 

The Relevant Notification enclosed.

 
Attachment:  1366435199.jpg
 

17 Apr, 2013


NEW FORMS FOR EXCISE

 NEW FORMS FOR EXCISE

 

 

CBEC has prescribed new Forms for filing appeal before CESTAT for  Excise related matters.

 

The relevant notification alongwith new form is attached.

 

 
Attachment:  1366198408.pdf
 

17 Apr, 2013


NEW FORMS FOR CUSTOMS

 NEW FORMS FOR CUSTOMS

 

 CBEC has prescribed new Forms for filing appeal before CESTAT for Customs related matters.

 

The relevant notification alongwith new form is attached.

 
Attachment:  1366198608.pdf
 

17 Apr, 2013


FILING OF PAN AND IEC WITH VAT DEPT, DELHI

 FILING OF PAN AND IEC WITH VAT DEPT, DELHI

 

 

The Delhi Value Added  Tax Department has made it mandatory for every dealers to file :

1.      Permanent Account Number (PAN) and

2.     Importer Exporter Code (IEC) in case the dealer is engaged in import/export business.

 

The information shall be filed in DVAT 52 on or before 30th May 2013.

The relevant notification is attached.

 
 

17 Apr, 2013


RATE OF EXCHANGE FOR JAPANESE YEN

 RATE OF EXCHANGE FOR JAPANESE YEN

 

 

The CBEC has prescribed the rate of exchange for Japanese Yen under the powers conferred by Section 14 of the Customs Act 1962.

 

The relevant notification is attached. This notification is valid w.e.f. 11th April 2013.

 

 

 
 

17 Apr, 2013


SERVICE TAX RETURN DATE EXTENDED

 SERVICE TAX RETURN DATE EXTENDED

 

The Central Board of Excise & Customs hereby extends the date of submission of the Form ST-3 for the period from 1st July 2012 to 30th September 2012, from 15th April, 2013 to 30th April, 2013.

 
 

17 Apr, 2013


CENTRAL EXCISE

 If the assessee has defaulted in payment of duty within the time prescribed under Rule 8 of Central Excise Rules 2002 and within the extended period as prescribed under Rule 8 (3A) of Central Excise Rules 2002, then the assessee shall pay excise duty for each consignment at the time of removal without utilizing the CENVAT credit till the date the assessee pays the outstanding amount including interest thereon. This has been confirmed by the Honb’le High Court, Karnataka.

 

 Central Excise - In case of default, prohibition under Rule 8(3A) from utilizing CENVAT Credit account is not with reference to arrears but entire credit lying in account - Petition rejected: HC

 THE Petitioner was issued a SCN dated 04/01/2012 alleging default in payment of Central excise duty during the period from December 2010 to May 2011 requiring the payment of excise duty on each consignment in cash, without utilizing CENVAT Credit until payment of outstanding amount together with interest. Petitioner paid the said amount for the months from December 2010 to May 2011 on 21.5.2011 (Rs.18,19,096/- including interest of Rs.56,062/-) and paid interest of Rs.18,262/- vide challan dated 21.5.2011 and challan dated 21.6.2011 (Rs.3,00,000/- including Rs.10,000/- interest). The further allegation was that during the months of December 2010 to May 2011 petitioner utilized CENVAT Credit amount of Rs.10,45,749/-, instead of discharging duty in PLA on consignment-wise clearances, without utilizing the CENVAT Credit.

In response to the SCN, the Petitioner replied that the prohibition from utilizing CENVAT Credit account under Rule 8(3A) of CER, 2002 is with reference to arrears and not the entire credit and, therefore, an amount of Rs.6,29,750/- has been correctly utilized. In addition, it was stated that there being no dispute that all arrears were cleared by May 2011, and if required to pay through PLA again, they will be entitled to take credit of that sum in CENVAT Credit account while the entire exercise is revenue neutral.

As regards interest, it was stated that Rule 8(3A) does not permit levy of interest on utilization of CENVAT Credit during the prohibition period and hence, no interest is leviable on Rs.10,45,749/-. As regard penalty, it was stated that petitioner being under a serious liquid crunch could not pay the duty within the stipulated time.

The adjudicating authority declined to accept the plea of the petitioner and by order dated 7.3.2012 held that the petitioner wrongly utilized the CENVAT Credit for payment of Rs.10,45,749/- towards Central Excise duty for the months of December 2010 to May 2011, and, hence it is to be treated as non-payment of duty under Rule 8 of the Central Excise Rules, 2002, with a further direction to demand the same from the petitioner in cash in terms of Rule 8(3A) of the CER, 2002 read with Section 11A of the CEA, 1944, in addition to recovery of interest under Section 11AB of the CEA, 1944 and penalty of Rs.50,000/- under Rule 25 of the CER, 2002.

In appeal, the Commissioner(A) directed the petitioner to make a pre-deposit of Rs.10,45,749/- in cash and report compliance by 25.1.2013 failing which appeal would stand dismissed for non-compliance.

So, the matter is taken to the High Court.

It is inter alia submitted that the duty of Rs.20,45,600/- and Rs.84,324/- towards interest, was paid, in respect of consignments removed during the months of December, 2010 to May, 2011 and therefore, the Appellate Authority was not justified in directing a pre-deposit as it would amount to double payment.

The Revenue representative justified the order of the lower appellate authority by submitting that sub-Rule (3A) of Rule 8 of the CER, 2002 is unambiguous and does not admit of any interpretation other than cases of default in the payment of duty i.e. if the assessee fails to make payment of the duty within 30 days from the date the duty falls due, he is disentitled to utilise the CENVAT Credit for payment of duty, penalty and interest. In other words, on failure to pay the duty within the time stipulated under Sub-Rule (1) of Rule 8 and a further period of 30 days under Sub-Rule (3A), the assessee is disentitled to use the credit facility and is liable to pay duty for each consignment at the time of its removal and it is only after the assessee pays the entire outstanding amount including interests thereon, they will be entitled to utilise the credit facility and not otherwise. Inasmuch as since the amount of Rs.10,45,749/- paid by the petitioner by utilizing the CENVAT Credit, though unavailable to the petitioner, in law, was a nullity and could not be recognised as payment towards duty, the Commissioner(A) was fully justified in directing the petitioner to deposit Rs.10,45,759/- towards pre-deposit, a mandate under s.35F of the CEA, 1944.

The High Court observed -

‘10. Having heard the learned counsel for the parties, perused the pleadings and examined the order impugned, under Sub-Rule (1) of Rule 8 of the Central Excise Rules, 2002 if an assessee, failed to pay the duty within the time stipulated i.e. on the 6th day of following month if it is paid electronically through internet banking or on the 5th day of following month in any other case, and a further period of 30 days under Sub-Rule (3A) is disentitled to make use of the CENVAT Credit. In the admitted facts, petitioner defaulted in the payment of duty for the months of December 2010 to May 2011, but did so with interest on 21.5.2011 in a sum of Rs.20,45,600/- towards duty and Rs.84,324/- towards interest and also payment of Rs.10,45,749/- towards duty by utilizing the CENVAT Credit, without disclosing the particulars against which it was paid nor the date of payment. Hence, it is not possible for this Court, at this stage to accept the plea of the petitioner as aired by its learned counsel, while I find force in the submission of the learned counsel for the revenue.

11. The order impugned does not suffer from serious infirmities occasioning grave injustice to the petitioner calling for interference in exercise of extraordinary writ jurisdiction under Article 226 of the Constitution of India.

Holding that the petition was devoid of any merits, the same was rejected and the petitioner was directed to comply with the order of the Commissioner(A).

 

 
 

12 Apr, 2013


EXEMPTION FROM EXCISE DUTY

 EXEMPTION FROM EXCISE DUTY

 

Installing new plant and machinery at a distant plot cannot be construed as expansion of existing unit for the purpose of area-based exemption from excise duty

CBEC has, through the Circular No.968/02/2013-CX dated 01.04.2013, clarified that eligibility criteria for exemption from excise to the units located in the Area Based Exemption Zone.

 

The Notification Nos. 49/2003 and 50/2003 both dated 10.06.2003 provided area based exemption from the excise duty.

CBEC had further issued a Circular No. 960/03/2012-CX dated 17.02.2012  and clarified that exemption would continue to be available for the residual period of exemption, if an exempted unit acquires adjacent plot of land and installs  new plant and machinery on such land. Such an expansion was considered as akin to expansion by way of installing new plant and machinery inside the existing plot/premises. 

It has been further clarified that term ‘adjacent’ used in the above mentioned circular would not include a plot which is atsome distance away from the exempted unit.

In other words exemption would continue to be available only when the exempted unit undertakes expansion by acquiring the adjoining plot with at least one common boundary with the exempted (existing) unit and the same is merged to make it one unit.

 

 
Attachment:  1365745669.pdf
 

12 Apr, 2013


CENVAT CANNOT BE DENIED ON INPUTS

 CENVAT CANNOT BE DENIED ON INPUTS AND CAPITALS GOODS PUT TO MANUFACTURE AND DESTROYED IN FIRE

  

EARLY in the morning of 10.09.2000, a fire accident took place in appellant's Butyl Phenol Plant. In the fire, in-process material lying in the plant of the factory and the capital goods were destroyed/damaged.

The next day, the appellant informed the department that the capital goods on which CENVAT credit of Rs.55,26,242/- was availed and the “inputs” put in process of manufacturing of final product on which CENVAT credit of Rs, 14,74,796/- was availed have been damaged and destroyed in fire.

Almost a year later, a SCN was issued by the jurisdictional authorities asking the appellant to reverse the total CENVAT credit availed by them on capital goods and inputs used in-process of manufacturing that were lost/damaged in the fire.

The adjudicating authority admitted the fact that the capital goods were used by the appellant and the inputs had also entered into manufacturing stream but denied credit on the ground that as the appellant has claimed insurance for the loss of inputs/in-process material/capital goods from the Insurance Company, therefore, credit cannot be allowed.

The Commissioner (Appeals) also denied the CENVAT credit citing the Tribunal decision in Monica Electronics (2002-TIOL-509-CESTAT-DEL)

The appellant is before the CESTAT and submits that credit is not deniable since –

Ø  It is not disputed that the capital goods were in use since the year 1998 and that the inputs had entered the manufacturing stream and hence credit thereon is admissible as per Board's Circular No. 66/88-CX-6 dated 06.09.1988;

 

Ø  A certificate from the National Insurance Company certifying that the Insurance Company has not considered the claim of the MODVAT/CENVAT credit of duty paid while entertaining their claim for damaged capital/input/work in-process was also produced before the Commissioner (Appeals) by the appellant, however, the same was not considered.

 

Ø  Decision of the Tribunal in Monica Electronics is not applicable to the facts of the case.

The Revenue representative supported the order of the lower authorities.

The Bench observed –

“7. The facts are not in dispute. The adjudicating authority has denied the credit on the premise that the appellant has filed insurance claim for the damaged goods/capital goods, therefore, credit is not admissible. But the appellant has been able to prove through a certificate issued by the National Insurance Company that they have not entertained the Modvat claim filed by the appellant. Therefore, the ground on which the adjudicating authority denying the credit, is not sustainable. The first appellate authority denied the CENVAT credit by relying on the decision of Monica Electronics (supra). The facts in this case are distinguishable from the facts of the case of Monica Electronics (supra), inputs were damaged prior to issuance for manufacture. It means that ‘inputs' were not gone into manufacturing process, therefore, credit is inadmissible but in this case, it is not in dispute that ‘inputs' have gone in the process of manufacturing and capital goods were also in use therefore, credit cannot be denied. In the case of CCE vs Indichem Electronics -2003 (151) ELT 393 (T) and Motor Industries Co Ltd. vs CCE- (2004-TIOL-122-CESTAT-BANG) wherein this Tribunal has held that when the capital goods/inputs were in use for manufacturing of final products and lost during the fire accident, credit cannot be denied. Relying on the above decision, we set aside the impugned order and allow the appeals with consequential relief, if any.”

 

 
 

12 Apr, 2013


CESTAT ORDER

 Draconian Circular - CESTAT Order under Rule 41

 

Hon’ble Bangalore CESTAT has passed order under Rule 41 of the CESTAT (Procedure) Rules, 1982. The CESTAT directed all the Chief Commissioners not to take coercive steps to recover the disputed amounts when the Stay applications are pending before the CESTAT:

(a) unless the case is one where Service Tax/Central Excise duty has been collected but not paid;

(b) unless the case is one of admitted duty/service tax liability [before adjudicating authority/Commissioner (Appeals)] yet to be discharged with interest;

(c) If the case is one where the assessee has deposited the entire duty/service tax liability determined at any stage;

(d) unless the case is one where Commissioner (Appeals) has rejected the appeal on the ground that the appeal was filed beyond the time limit.

Where the Commissioner of Central Excise/Customs/Service Tax thinks that the assessee does not have a prima facie case and pre-deposit is to be ordered and where the Duty/Service Tax/CENVAT credit demanded is more than Rs. 1 crore, it will be open to the Commissioner concerned to file an application for out-of-turn hearing of the stay application filed by the assessee, certifying both the aspects. Such applications shall be listed to be considered within 30 days of filing.

The order is to be sent to all the Chief Commissioners in Andhra Pradesh, Karnataka and Kerala for immediate circulation and compliance.

It is to be seen as to how the Chief Commissioners react.

RECENTLY, Karnataka High Court has directed the Union of India to constitute additional Benches of CESTAT for early disposal of the Stay applications. The High Court was disposing  the Writ Petitions filed against the CBEC Circular dated 01.01.2013. The High Court observed that for three Southern States, there is only one Bench and a large number of matters are pending consideration. If that is so, then Union Government must wake up to the clarion call and constitute number of Benches as may be required for speedy disposal of the appeals. The High Court has also directed that a compliance report should be filed before the Registrar General before 03.06.2013, failing which, the matter would be taken seriously.

 

 
 

12 Apr, 2013


Dvat-51 Date Extended

 Dvat-51 date extended

 

 The VAT Department Delhi has extended date of DVAT-51. The Due Date filing of DVAT -51 along with C form for the financial year 2011-12, has been extended up to 10.05.2013.

 
 

12 Apr, 2013


DVAT Department- No Security Required

 DVAT Department- No Security Required

 

The  Delhi Value Added Tax  Department  herby direct that no security would be required to be furnished by such dealers, who apply for registration with the Department up to 5th April 2013.

 

The Relevant Notification enclosed.

 

 
 

15 Mar, 2013


Dvat-51 date extended

 

Dvat-51 date extended

 

The Delhi VAT Department extended the date for filing of DVAT-51 i.e. 10/04/2013 for the FY 2011-12.

 
 

11 Mar, 2013


FOREIGN EXCHANGE RATE ON CUSTOMS ACT PRESCRIBED

 FOREIGN EXCHANGE RATE ON CUSTOMS ACT PRESCRIBED  

 

 

The government vide Notification 28/2013 dt. 07.01.2013,has prescribed the Conversion Rate of each of the Foreign Currency. This Notification is valid for the 08.03.2013.

 

The said notification is being annexed.     

 
Attachment:  1362982489.pdf
 

11 Mar, 2013


JURISDICTION OF COMMISSIONER (APPEALS), CENTRAL EXCISE

 The Central government vide notification on 05/2013 dt. 06.03.2013 has defined the Jurisdiction of Commissioner (Appeals),Central Excise, Mysore. Under this notification, Commissioner of Central Excise (Appeals), Mysore will have Jurisdiction over Commissionerate situated at Belgaum, Mysore and Mangalore.

 

The said notification is annexed.    

 
Attachment:  1362982396.pdf
 

11 Mar, 2013


CENTRAL EXCISE 24 YEAR OLD CASE YET TO BE SETTLED

 Central Excise …….  Amazing system of Indian Judiciary ……. this is a approx 24 years old case and the story goes on and yet to be settled .....

 

Job worker paying duty & appellant availing higher notional credit - Whether job worker could avail credit on raw materials purchased by appellant from MMTC under actual user conditions not considered - matter remanded: CESTAT

 

Proceedings were initiated against the appellants by a SCN dated 8.6.1989. The allegation in the SCN revolves around the erstwhile rule 57B of the CER, 1944 which allowed a manufacturer to take an enhanced quantum of MODVAT credit of the duty paid in case he had sourced the “inputs” from a SSI manufacturer. The appellants are engaged in the manufacture of electric wires and cables and had filed the requisite MODVAT declaration u/r 57G of the CER, 1944 indicating that the inputs are Copper and Aluminium wire rods. The appellants procured the duty paid Inputs under regular gate passes in their own name and sent the same to their job workers by endorsing the original Gate passes in their favour.

The job workers availed credit of the duty paid on inputs and manufactured and cleared Copper and Aluminium wires at the concessional rate of duty as per Notification No. 175/86 dated 1.3.86 as amended. Upon receipt of the same, the appellant took enhanced MODVAT credit as per the provisions of para 5 of the Notification No. 175/86-CE read with Rule 57B of the CER.

The adjudicating authority held that the transaction between the job workers and the appellants is fully covered under the scope of Rule 57F(2) of the CER read with Notification No. 214/86-CE dated 2.4.86 and hence the higher notional credit taken by the appellant under Rule 57B of the Rules was not permissible for such transaction because they were sending their own goods for job work and receiving them back and hence ownership never changed hands. In the result, the adjudicating authority confirmed the demand and imposed penalties. This was in April, 1990.

The Tribunal vide final order dated 24.12.2002 allowed the appeals filed by the appellants. Revenue challenged the order before the Bombay High Court and vide order dated 13.10.2010 the matter was remanded to the Tribunal.

The Tribunal vide order dated 23.2.2011 again set aside the demand and allowed the appeals filed by the appellants.

Revenue again challenged the order before the Bombay High Court and vide order dated 24.2.2012 the High Court again set aside the Tribunal's order dated 23.2.2011 and remanded the matter to the Tribunal to take fresh decision on all questions as formulated in para 6 of the judgment dated 13.10.2010 passed by the Bombay High Court.

Para 6 of the judgment dated 13.10.10 is reproduced below:-

“6). The question as to whether the Central Cables Pvt. Ltd. had transferred the raw materials to the job workers, if transferred the goods for manufacture of intermediate product, then how the job worker could take credit of duty paid by Central Cables Pvt. Ltd. on raw materials purchased from MMTC under actual user conditions has not been considered by the Authorities below. Similarly, if the respondent nos. 3 to 5 were the job workers and after manufacturing the intermediate products were liable to return the goods to the suppliers of raw materials, namely, Central Cables Pvt. Ltd. then where was the question of their returning the manufactured goods on payment of duty has not been considered by any of the Authorities below. If the job worker was not liable to pay excise duty while returning the manufactured goods to the supplier of raw materials, then the question of the supplier of the raw materials claiming full credit under Rule 57B of the Central Excise Rules, 1944 does not arise at all.”

So, the appeals were taken up for a fresh decision on 17/10/2012.

The Bench observed -

“7. We have heard both sides and gone through the impugned order. The issue regarding the transfer of raw materials by Central Cables Pvt. Ltd. the appellants to job workers when the raw materials were procured from MMTC under actual user conditions has not been considered by the adjudicating authority. Now, the appellants produced the correspondence between the MMTC and the appellants regarding procurement of raw materials with reference to actual user condition. The contention of the appellants is that even in case the raw materials were procured under actual user condition, the same can be sent to the job workers for further processing. Therefore, there is no violation of the actual user condition.

8. We find that on the issue framed by the Hon'ble Bombay High Court on which the matter has been remanded, the adjudicating authority has not given any finding. The correspondence now produced by the appellants also requires verification. In view of this, we find that the matter requires reconsideration by the adjudicating authority in view of the observations made by the Hon'ble Bombay High Court in the order dated 13.10.2010 in Central Excise Appeal No.4/2003 and in order dated 24.2.2011 in C.E. Appeal No.25/11. We, therefore, remand the matter to the adjudicating authority after setting aside the impugned order to decide the issue afresh after affording an opportunity of being heard to the appellants.”

The Bench also noted that since the SCN was issued in the year 1989, the adjudicating authority should decide the issue preferably within six months.

 

 
 

07 Mar, 2013


SERVICE TAX RETURN DATE EXTENDED

 SERVICE TAX RETURN DATE EXTENDED

The Service Tax Department issued Order No.01/2013 on 06th March 2013, whereby it has extended the date of submission of the Form ST-3 for the period from 1st July 2012 to 30th September 2012, from 25th March, 2013 to 15th April, 2013.      

It has also been specified that the Form ST-3 is expected to be available on ACES around 20th March, 2013 and accordingly to factor the filing of returns by all assesses, the due date has been extended.  

 Copy of order is attached herewith for your kind perusal.

 
Attachment:  1362656207.pdf
 

07 Mar, 2013


CENTRAL EXCISE

 Central Excise Valuation ( Determination of Price of Excisable Goods )  Rules 2000

 Rule 10A  of Valuation Rules …. Appellants purchased raw materials for manufacture of moulded furniture from approved suppliers of the customers …..  Prima facie appellant is not covered by definition of 'job worker'……. Stay granted: CESTAT

NEW DELHI, FEB 27, 2013:  THE appellant manufactures plastic moulded furniture for M/s. Neelkamal Limited . In terms of agreement moulds for manufacture of furniture are supplied by M/s. Neelkamal Limited and the appellant procures raw materials from the manufacturer specified and approved by M/s. Neelkamal Limited . Plastic furniture is supplied by the Appellant to M/s. Neelkamal Limited at the price determined in terms the of pricing formula as specified in the agreement which is based on the cost of raw material including freight plus conversion cost at the rate of Rs.9.50 per kilograms weight of the moulded furniture plus excise duty as applicable. The appellant were discharging duty liability on the plastic moulded furniture manufactured by them and supplied to M/s. Neelkamal Limited on the above mentioned contract price.

The department took a view that the valuation has to be arrived at in terms of Rule 10A of Valuation Rules, 2000 inasmuch as the appellant is required to pay duty on the price at which the moulded furniture was sold by M/s. Neelkamal Limited .

Two demand notices dated 23.12.2010 and dated 27.01.2011 were issued to the appellant for demands of short paid duty amounting to Rs.96,89,812/- and Rs.16,98,957/- for the period March, 2007 to December, 2009 and January, 2010 to September, 2010 respectively along with proposal for penalty and interest. The SCNs also proposed imposition of penalty on Shri Gopal Krishan Gupta, Director of the appellant company under Rule 26 of the Central Excise Rules, 2002.

Interestingly, although the provisions of rule 10A came into effect from 01.04.2007, the department applied the same even in respect of the clearances made during the month of March, 2007. Quite likely that they missed the fine print that the notification 9/2007-CE(NT) dated 01.03.2007 inserting this rule 10A was to come into force from 01.04.2007.

Fortunately, the adjudicating authority viz. CCE, Chandigarh-II had his fundamentals clear to this extent and hence he dropped the demand raised for the month of March, 2007 of a whopping Rs.56,20,736/- (out of the demand of Rs.96,89,812/-) and confirmed the balance amounts involved in the two demand notices totalling Rs.57.68 lakhs. Equal penalty was also imposed along with interest. The Director of the company also saw a penalty of Rs.5 lakhs imposed upon him u/r 26 of the CER, 2002.

So, the appellant manufacturer and the Director are before the CESTAT with stay applications.

The appellant submitted that it is evident from the agreement between appellant and M/s. Neelkamal Limited that the appellant is principal manufacturer and is not covered by the definition of "job worker", as given in explanation to Rule 10A of Central Excise Valuation Rules, 2002; that the transactions between and the appellant and M/s. Neelkamal Limited were on principal to principal basis; though plastic moulds were supplied by M/s. Neelkamal limited , and the appellant had taken CENVAT credit of duty paid in respect of those moulds, the moulds were later on returned to M/s. Neelkamal Limited after reversing of CENVAT credit; that though raw materials were being purchased by the appellant from the suppliers approved by M/s. Neelkamal Limited it is the appellant who were paying for raw material and hence in terms of definition of 'job worker', as given in the explanation to Rule 10A, the appellant cannot be treated as job worker, as they were not manufacturing plastic moulded furniture out of inputs supplied by the principal manufacturer or any person authorised by them. The Tribunal decision in CCE, Hyderabad vs. M/s. Innocorp Ltd. and M/s. Dart Manufacturing India Pvt. Ltd.  was relied upon to buttress their contention that Rule 10A of the Valuation Rules could not be applied to the facts on hand and that they had a strong prima facie case for waiver of pre-deposit.

The Revenue representative referred to the various clauses of the agreement and submitted that the agreement had been deliberately drafted to give an impression that the transaction between the appellant company and M/s Neelkamal Limited was on principal to principal basis. Inasmuch as he submitted that the appellant should be made to make a pre-deposit.

The Bench observed -

“5. We have considered the submissions from both sides and perused the records. Provisions of Rule 10A of Central Excise Valuation Rules are applicable to the excisable goods manufactured or produced by a job worker on behalf of principal manufacturer. Explanation to this Rule defines the term 'job worker' as a person engaged in the manufacture or production of goods on behalf of a principal manufacturer, from any inputs or goods supplied by the said principal manufacturer or by any other person authorised by him. Prima facie, we find that in terms of agreement, the appellant are required to purchase the raw materials for the manufacture of moulded furniture from the persons approved by M/s Neelkamal Limited and it is the appellant who make payment for the raw material. Therefore, it cannot be said that the raw materials have been supplied by M/s. Neelkamal Limited or their authorised persons. Therefore, prima facie, we are of the view that the appellant company are not covered by the definition of 'job worker' under Rule 10A and the provisions of this Rule would not be applicable. In similar circumstances, the same view has been taken by the Tribunal in the case of CCE, Hyderabad vs. M/s Innocorp Ltd. and M/s. Dart Manufacturing India Pvt. Ltd . (supra).”

Holding that the appellants had made a case for waiver of pre-deposit, the Bench waived the same and stayed the recovery. The Stay applications were thus allowed.

 
 

07 Mar, 2013


Customs

CUSTOMS

Customs offices across the country will remain open on all Saturday Sunday in month of March 2013.

 
 

02 Mar, 2013


Budget highlights 2013 (customs provisions as proposed in the budget 2013-14)

 A.   AMENDMENTS IN THE CUSTOMS ACT, 1962:

 

1)      Section 27 is being amended to provide that if the amount of refund claimed is less than rupees hundred, the same shall not be refunded.

 

2)      Section 28 is being amended to provide that show cause notice will not be served where the amount demanded is less than rupees one hundred..

 

3)      Sub-section (2) of section 47 is being amended to reduce the interest free period for payment of import duty from five days to two days.

 

4)      Section 49 is being amended to restrict the period of storage of imported goods, pending clearance, in a public or private warehouse to thirty days and to provide that the Commissioner of Customs may extend the period of storage for further period not exceeding thirty days at a time.

 

5)      Section 69 is being substituted to provide that any warehoused goods may be exported to a place outside India without payment of import duty if a shipping bill or a bill of export in prescribed form or label or declaration accompanying the goods as referred to insection 82 has been presented in respect of such goods.

 

6)      Under the existing sub-section (6) of section 104, all offences under the Act are bailable. Sub-section (6) is being substituted with sub-section (6) and (7). Sub-section (6) provides that the following specified offences punishable under section 135 shall be non-bailable, namely:-

(a)    evasion or attempted evasion of duty exceeding Rs.50 lakh;

 

(b)   prohibited goods notified under section 11 which are also notified under sub-clause (C) of clause (i) of sub-section (1) of section 135;

(c)    import or export of any goods which have not been declared in accordance with the provisions of this Act and the market price of which exceeds Rs. 1 crore;

 

(d)   Fraudulently availing of or attempt to avail of drawback or any exemption from duty provided under this Act, if the amount of drawback or exemption from duty exceeds Rs.50 lakh.

 

Sub-section (7) provides that all other offences except those specified in sub-section (6) shall be bailable.

 

 

 

7)       A proviso is being inserted in sub-section (2A) of section 129B to provide that in cases where the delay in disposing of the appeal is not attributable to the appellant, the Tribunal may extend the period of stay by a period not exceeding 185 days subject to the condition that if the appeal is not disposed of within the total period of 365 days from the date of order, the stay order shall stand vacated.

 

8)      Section 129C is being amended to enhance the monetary limit of the Single Bench of the Tribunal to hear and dispose of appeals from Rs.10 lakh to Rs.50 lakh.

 

9)      In sub-clauses (B) and (D) of clause (i) of section 135(1), the threshold limit for punishment in an offence relating to evasion or attempted evasion of duty or fraudulently availing of or attempting to avail of drawback or any exemption from duty in

      connection with export of goods, has been increased from Rs.30 lakh to Rs.50 lakh.

 

 

B.   Proposals involving changes in rates of duty under Custom Tariff Act,             

      1975:-

 

S.NO       HEADING                                                        BEFORE BUDGET                                  AFTER BUDGET

 

 

I.                   AGRICULTURE/AGRO PROCESSING/

PLANTATION SECTOR:

 

1)      Dehulled Oat Grain                                       30%                                      15%

2)      Hazel Nuts                                                    30%                                      10%

3)      De-oiled rice bran oil cake                            10%                                       NIL

 

 

II.                AUTOMOBILES:

 

1)      New passenger cars and other motor vehicles

(high end cars) with CIF value more than

US$ 40,000 and/or engine capacity exceeding

3000cc for petrol run vehicles and exceeding

2500 cc for diesel run vehicles.                                75%                                   100%

 

2)      Motor cycle with engine capacity of 800cc

or more.                                                                   60%                                   75%

 

                                                                        BEFORE BUDGET                           AFTER BUDGET

 

 

III.             METALS:

 

1)      Ilmenite unprocessed                                                 NIL                                        10%

Upgraded Iilmenite                                                           NIL                                        5%

2)      Bauxite                                                                      NIL                                       10%

3)      Stainless steel wire cloth stripe,                                  10%                                        5%

Wash coat for use in the manufacture                   7.5%                                       5%

of catalytic convertors and their parts.

 

4)      Full exemption from export duty is being provided to galvanized steel sheets falling under certain sub-headings, retrospectively w.e.f. 01.03.2011.

 

 

IV.             PRECIOUS METALS:

 

1)      Pre-forms of precious and semi-precious stones.     10%                                          2%

 

 

V.                CAPITAL GOODS/INFRASTRUCTURE:

 

1)      Steam Coal- BCD,                                                    NIL                                        2%

Steam Coal- CVD                                                           1%                                         2%.

2)      Bituminous Coal- BCD                                              5%                                         2%

Bituminous Coal- CVD                                                    6%                                         2%.

3)      20 specified machinery for use in leather and              7.5%                                      5%

footwear industry.

 

 

VI.             AIRCRAFTS & SHIPS:

 

1)      Yachts and Motor Boats                                              10%                                   25%

      2)  Time limit for consumption of imported goods by ship

            repair units.                                                             3 months                           1 year

      3)  Time period for consumption/installation of parts

            and testing equipments imported for maintenance,

            repair and overhaul (MRO) of aircrafts by unites

            engaged in such activities.                                        3 months                           1 year

 

4)       Presently, the basic customs duty exemption is available to parts and testing equipments for maintenance, repair and overhaul of aircrafts. This exemption is now being extended to parts and testing equipments for maintenance, repair and overhaul of aircrafts and parts thereof.

 

 

 

VII.          ENVIRONMENT PROTECTION:

 

1)      Full exemption from basic customs duty is being provided to lithium ion automotive battery for manufacture of lithium ion battery packs for supply to the manufacturers of hybrid and electric vehicles.

2)      Time period of exemption (Nil BCD, CVD of 6% and Nil SAD) for the specified parts of electric and hybrid vehicles is being extended by 2 more years up to 31st March, 2015.

 

BEFORE BUDGET                  AFTER BUDGET

 

 

VIII.       TEXTILES:

 

1)      Raw Silk (not thrown), of all grades                         5%                                    15%

2)      Textile Machinery & Parts.                                      7.5%                                  5%

 

 

IX.             ELECTRONICS/HARDWARE:

 

1)      Set Top Boxes for TV                                              5%                                    10%

 

 

X.                MISCELLANEOUS:

 

1)      Full exemption from basic customs duty and additional customs duty is being provided to trophy imported by National Sports Federation recognized by the Department of Sports and Youth Affairs or any Sports Body registered under Societies Registration Act, in connection with any international tournament held in India.

 

2)      Withdrawal of exemption from education cess and secondary & higher education cess on aircraft and aircraft parts, soyabean oil, olive oil etc.

 

     C.  Baggage Rules, 1998 are being amended-

 

(i)     The duty free allowance in respect of jewellery for an Indian passenger who has been residing abroad for over one year (Rule 6, Baggage Rule 1998) or a person who is transferring his residence to India (Rule 8, Baggage Rule 1998) is being raised from Rs.10,000 to Rs.50,000 in case of a gentleman passenger and from Rs.20,000 to Rs.1,00,000 in case of a lady passenger.

 

 

(ii)   The duty free allowance for crew member of vessel/aircraft (Rule 10, Baggage Rule 1998) is being raised from Rs.600 to Rs.1500.

 

 
 

02 Mar, 2013


FILING OF DVAT-51

 The VAT Department Delhi, has extended the Last Date of filing DVAT-51. All the assesses will now be required to file DVAT -51  along with C form for the financial year 2011-12, by 15.03.2013. 


The Notification/ Order for filing DVAT-51 Form attached.


 

 
Attachment:  1362219969.doc
 

02 Mar, 2013


BUDGET HIGHLIGHTS 2013 (Service tax provisions as proposed in the Budget 2013-2014)

 v  NO CHANGE IN RATE OF SERVICE TAX (i.e 12% SERVICE TAX RATE RETAINED)

 

v   AMENDMENT IN MEGA EXEMPTION NOTIFICATION NO.25/2012 DATED 20.06.2012 

      WITH EFFECT FROM 01.4.2013.

 

Ø  Clause No.4 of mega exemption notification no.25/2012 dated 20.06.2012 is being amended with effect from 01.4.2013 to reduce the exemption limit for charitable organization from Rs.25 lac to threshold limit (Rs.10 lac)

 

Ø  Clause No.19 of mega exemption notification no.25/2012 dated 20.06.2012 is being amended with effect from 01.4.2013. Even though restaurants having air conditioning facilities don’t have license to serve liquor, but will come under the purview of service tax. 

  

Ø  Exemption provided under Clause No.20 and Clause No.21 of mega exemption notification no.25/2012 is being rationalized. (Transporation of certain goods by rail or vessel and Transporation of certain goods transport agency)

 

v   EXEMPTION WITHDRAWN FROM MEGA EXEMPTION NOTIFICATION NO.25/2012  DATED 20.06.2012 WITH   

      EFFECT FROM 01.04.2013

 

Ø  Exemption under Clause No. 9 of mega exemption notification no.25/2012 dated 20.06.2012 is being withdrawn w.e.f  01.04.2013.Service provided by an educational institutions by way of  renting of immovable property is proposed to be covered under the service tax net.

 

Ø  Exemption under Clause No. 24 of mega exemption notification no.25/2012 dated 20.06.2012 is being withdrawn w.e.f 01.04.2013.           Service by way of vehicle parking to general public is proposed to be covered under service tax net .

 

Ø  Exemption under Clause No. 15 of mega exemption notification no.25/2012 dated 20.06.2012 is being withdrawn w.e.f 01.04.2013. Exemptions will now be restricted to the exhibition of cinematograph films in cinema hall or cinema theatre

  

v  RETROSPECTIVE EXEMPTION           

                    

Ø Retrospective exemption is being extended to the Indian Railways on the service tax leviable on   various taxable services provided by them during the period prior to the 1st day of July 2012, to the extent show cause notices have been issued till 28th Feb 2013.

 

v  AMENDMENTS IN ABATEMENT NOTIFICATION NO.26/2012 DATED 20.06.2012 WITH EFFECT FROM 01.03.2013

 

Ø  Construction of complex, building or civil structure or a part thereof intended for sale to a buyer,  with carpet area of less than 2,000 sq.ft or value less than of Rs 1 crore will enjoy 75% abatement

 

Ø  Construction of complex, building or civil structure or a part thereof intended for sale to a buyer, with carpet area of more than 2,000 sq.ft or value of more than Rs 1 crore will enjoy 70% abatement.

  

v   INTRODUCTIONS/AMMENDMENTS IN SECTIONS 

                                        

Ø    Maximum penalty in case of  failure to take registration or fails to pay tax is up to Rs.10,000 

       [Sec 77(1)a)]

                 

Ø    New Section 78A introduced to levy penalty on Manger, Director , Secretary and other officer to the   

      extent of Rs.100,000 [Sec 78A]

 

Ø   New Section 91 introduced to provide for power to arrest. Commissioner of Central Excise is empowered to authorize any officer of Central Excise not below the rank of Superintendent of Central Excise, to arrest a person for specified offences particularly nonpayment of collected service tax.

 

v  SERVICE TAX VOLUNTARY COMPLIANCE ENCOURAGEMENT SCHEME, 2013 ANNOUNCED.


 
 

02 Mar, 2013


BUDGET HIGHLIGHTS 2013-14 (EXCISE PROVISIONS)

 

                       BUDGET HIGHLIGHTS 2013-14

                     (EXCISE PROVISIONS)    

 

1.   Basic Excise Duty of 12% has been retained as before.

2.   Proposals involving changes in CENTRAL EXCISE TARIFF ACT, 1985:-

HEADING                                                        RATE OF DUTY/AMOUNT

                                                                   BEFORE BUDGET           AFTER BUDGET

        I.            AUTOMOBILES:

1.      Excise duty on SUVs is               27%                            30%

2.      Excise duty on truck chassis       14%                            13%

      II.            METALS;

1.      Silver (From Zinc/ Lead smelting) Nil                               4%

2.      Compounded levy on stainless

steel “patta patti”                              Rs. 30,000               Rs.40,000

3.      Trimmed & Untrimmed Sheet                 Nil                   Rs.3500/MT

    III.            AIRCRAFT & SHIPS

1.      Ships & Other Vessels                                6%               EXEMPT

    IV.            HEALTH

1.      Branded Ayurvedic medicaments          Nil                             12%

(MRP based valuation)                              Nil        (Abatement -35% 
                                                                                   of MRP)

      V.            ELECTRONICS/ HARDWARE

1.      Mobile phones                                           1%                    6%

(Price exceeding Rs. 2,000)                   

    VI.            MISCELLANEOUS:

1.   Marble Tiles & Slabs                     Rs. 30/sq.mtr            Rs. 60/sq.mtr

 

  VII.            ADDITIONAL POINTS

1.      Full exemption from excise duty is being provided on hand made carpets and carpets and other textile floor coverings of coiror jute, whether or not handmade.

 

2.      'Zero excise duty route', as existed prior to Budget 2011-12, is being restored in respect of branded readymade garments and made ups. In  case of cotton, there will be zero duty at the fiber stage and in the case of spun yarn of manmade fibers, there will be a duty of 12% at the fiber stage. The 'Zero excise duty route' will be in addition to the CENVAT route now available.

 

 

3.      Full exemption from excise duty is being provided to intermediate goods manufactured and consumed captively by exempted units under Area Based Exemption Scheme in Himachal Pradesh and Uttarakhand.

 

 

4.      Peanut Butter (Tariff item 1517 90 20) has been made non-excisable.

 

5.      Full exemption for excise duty is being provided on tapioca sago (sabudana) and tapioca starch manufactured and consumed captively in the manufacture of tapioca sago (Sabudana).

 

6.      Full exemption from excise duty is being provided on heena powder or paste, not mixed with any other ingredient.

 

  AMENDMENTS IN THE CENTRAL EXCISE ACT, 1944:

 

1.      Section 9 provides that an offence case involving evasion in which the duty leviable exceeds Rs.Thirty lakh shall be punishable with a term of imprisonment extending to seven years with fine. This section is being amended so as to substitute the amount of Rs.Thirty lakh rupees with Rs. Fifty lakh.

 

2.       Section 9A is being amended to make an offence cognizable and non-bailable where the duty liability exceeds Rs.50 lakh and punishable under clause (b) or clause (bbbb) of sub-section (1) of section 9.

 

 

 

 

 

 

 
 

02 Mar, 2013


T2 FORM DATE EXTENDED

The VAT Department Delhi has extended the applicability of T 2 Form for dealers having Gross Turnover of Rs.10 Crores and above.

 

T 2  Form will now be applicable from 01.04.2013.


 
Attachment:  1362219164.jpg
 

27 Feb, 2013


Last date for filing of Service tax return of 2nd qtr 2012-13 is 25th march 2013

 The Central Govt. Vide Notification No. 01/2013 of Service Tax dated 22.02.2013 has release form for filing of Service Tax Return and due date for the same is 25th March 2013.

 
Attachment:  1361959467.pdf
 

24 Feb, 2013


Tribunal Judgment

 

EoU clearing fruit pulp to own DTA unit for processing into juice and sale thereof - Revenue demanding duty on MRP basis on juice on ground that both units are related - payment of duty by EoU proper - Stay allowed: CESTAT

MUMBAI, FEB 21, 2013: THE applicant is a 100% EOU and cleared fruit pulp to their DTA unit on payment of appropriate duty under the permission granted by the competent authority. The DTA unit processed the fruit pulp and sold the juice. The Revenue is of the view that since the applicants and the DTA are related persons, therefore, the applicants are liable to pay duty on MRP on the juice cleared by the DTA unit.

Since the Commissioner (A) upheld the demand of Rs.28,16,877/- and interest and penalty, the applicant is before the CESTAT.

The applicant did not have to say much for the Bench could see through the case.

The CESTAT observed -

"6. Keeping in view the facts and circumstances of the case and as the applicants cleared fruit pulp and are liable to pay appropriate duty on the fruit pulp and not on the juice, hence the applicant has a prima facie case in their favour and the amount already deposited is sufficient for hearing of the appeal. Pre-deposit of the remaining dues is, therefore, waived and recovery thereof stayed for hearing of the appeal."

In fine, the stay petition was allowed.

 
 

24 Feb, 2013


Amendment in epcg scheme

 Amendment in epcg scheme 


The Central Government has amended Foreign Trade Policy 2009-2014 whereby Basic Customs Duty (BCD) can be remitted in the Form of freely transferable duty credit script(s).

 
 

24 Feb, 2013


RELIEF TO EXPORTERS

 The Directorate General of Foreign Trade has issued a Circular on 31st Jan 2013, whereby they have given relief to the exporters in case the exporters have not mentioned “Declaration of Intent” on shipping bill for claiming various benefits as mentioned in Chapter 3, 4, 5, & 6 of Foreign Trade Policy.

 

Chapter 3 deals with various Promotional Measures given by Department of Commerce.

 

Chapter 4 deals with Duty Exemption/ Remission Scheme

 

Chapter 5 deals with Export Promotion Capital Goods Scheme, and

 

Chapter 6 deals with Export Oriented Units (EOUs), Software Technology Parks (STPS) etc.

 
 

24 Feb, 2013


Notified banks are now act as iiird party

 Dealers having no internet banking facility or hesitate to avail the same will now pay cash/ cheque to the banks who is turn act as IIIrd Party and fill online challan on behalf of dealers as per the circular attached.

 

 

 
 

24 Feb, 2013


VAT AUDIT REPORT

 The Department of Trade and Taxes (Delhi) prescribe the Audit Report format as form AR-1. Every registered dealer liable to get his accounts audit as per section-49 of the Act read with Rule 42-A of the Rules shall furnish audit report in Form AR-1 within seven-and-a-half month from the end of the year in duplicate. This notification is applicable only for dealers with a gross turnover of Rs.10 crores (Rupees Ten crore) and above in 2011-12 or in any of the subsequent financial years. Dealers exclusively dealing in commodities listed in the First Schedule appended to the Act and the dealers with 100% export turnover shall be exempted from furnishing audit report under this notification.

 

Please find the enclose notification and Form AR-1.

 
 

24 Feb, 2013


Shocking isn’t it?

 63% of total tax revenue is paid by 1.3 % of tax payers having income above 20 Lac.

 

Currently tax is levied at 10% on annual income between Rs.2 Lac & Rs.5 Lac, and at 20% between Rs.5 Lac & Rs.10 Lac. Income above Rs.10 Lac in taxed at 30%.

 

Estimated Numbers of taxpayers and tax collected in 2011-12.

 

Slab (in Rs.)_

No. Of taxpayers (in million)

% of taxpayers

Tax collected (in Rs. Crore)

% of tax collected

0-5 Lacs

28.84

89

15,010

10.1

5-10 Lacs

1.79

5.5

21,976

14.8

10-20 Lacs

1.38

4.3

17,858

12.1

Above 20 Lacs

0.41

1.3

93,229

63

TOTAL

32.41

100

1,48,073

100

 
 

24 Feb, 2013


SYSTEM ASSISTED ASSESSMENT ON THE BASIS OF 2A AND 2B DATa MISMATCH FOR TAX PERIOD JULY, AUGUST, SEPTEMBER, 2012

The Department of Trade & Taxes (Delhi) has issued Public Notice whereby the date of assessment to be framed on the basis of mismatch between 2A and 2B data filed by dealers has been extended by two weeks and the assessment and penalty orders will be issued within next five working days.

 

The Department has requested all the dealers to check the status of online at www/dvat.gov.in under “Mismatch report” and get the mismatch reconciled, latest by 20.02.2013, to avoid additional tax, interest and penalty.  

  

 
 

24 Feb, 2013


INCREMENTAL EXPORTS INCENTIVISATION SCHEME

 The DGFT, vide notification no. 27 (RE-2012)/2009-2014 has prescribed the Incremental Exports Incentivisation scheme.

 

In brief, as per the notification, an IEC holder will be entitled to an additional duty credit scrip @ 2% on the incremental growth in Exports during the period 01.01.2013 to 31.03.2013 as compared to 01.01.2012 to 31.03.2012.

 

This benefit will be over and above any other benefits being claimed by the exporter under any other schemes.

 

The duty credit script will be freely transferable and shall also be available for domestic sourcing as per Foreign Trade Policy 2009-14.     

 

 
 

24 Feb, 2013


DESCRIPTION OF IMPORT ITEMS

 The Directorate General of Foreign Trade (DGFT) has issued Public Notices relating to import of items under Standard Input Output Norms (SIONs) and export of fresh grapes, groundnut, peanut; export of pharmaceutical grade sugar; withdrawal of provision for drawing of export samples of basmati rice for variety identification purposes and issued a clarification regarding export of cotton through Wagah boarder.

 

Please find enclosed herewith the detailed information on the same.

 

We hope that it will assist you.

 
 

24 Feb, 2013


 PETRO PRODUCTS LIKELY TO COME UNDER GOODS, SERVICES TAX NET

 Ø PETRO PRODUCTS LIKELY TO COME UNDER GOODS, SERVICES TAX NET


After an agreement on the compensation issue, States have been given the freedom to time their entry into the Goods and Services Tax (GST) fold. At the same time, the Centre and States have agreed not to constitutionally debar petroleum products from the ambit of GST. These were some of the outcomes on the second day of the meeting of the Empowered Committee of State Finance Ministers in Bhubaneswar.

 

 

Ø  CENTRE, STATES REACH CONSENSUS ON GST, RAISE HOPES OF EARLY ROLLOUT

 

 

The Centre and state governments on Tuesday reached a broad understanding on the structure of the proposed goods and services tax (GST), raising hopes of an early rollout of the UPA government's ambitious indirect tax reform. The central government has agreed to drop the contentious dispute settlement body in the Constitutional Amendment Bill and also decided on a partial rollout of GST, giving states the flexibility to join or exit the framework.

 

 

 
 

24 Feb, 2013


RATE OF ENCHANGE OF ONE UNIT OF FOREIGN CURRENCY EQUIVALENT TO INDIAN RUPEES

The Central Board of Excise and Customs hereby determines that the rate of exchange of conversion of each of the foreign currency, with effect from 18th January, 2013 be the rate mentioned against it in the corresponding entry in column (3) thereof, for the purpose of the section 14, relating to imported and export goods.

 

S. No.

Foreign Currency

Rate of exchange of one unit of foreign currency equivalent to Indian rupees

(1)

(2)

(3)

 

 

(a)

(b)

 

 

(For Imported Goods)

(For Exported Goods)

1.

Australian Dollar

58.55

57.10

2.

Bahrain Dinar

149.50

141.10

3.

Canadian Dollar

56.35

54.80

4.

Danish Kroner

9.90

9.60

5.

EURO

73.60

71.75

6.

Hong Kong Dollar

7.15

7.00

7.

Kenya Shilling

65.00

61.30

8.

Kuwait Dinar

200.45

188.55

9.

New Zealand Dollar

46.70

45.45

10.

Norwegian Kroner

10.00

9.65

11.

Pound Sterling

89.05

86.95

12.

Singapore Dollar

45.30

44.10

13.

South Africa Rand

6.40

6.00

14.

Saudi Arabian Riyal

15.05

14.20

15.

Swedish Kroner

8.55

8.30

16.

Swiss Franc

59.55

58.05

17.

UAE Dirham

15.35

14.50

18.

US Dollar

55.25

54.25

S. No.

Foreign Currency

Rate of exchange of 100 units of foreign currency equivalent to Indian rupees

(1)

(2)

(3)

 

 

(a)

(b)

 

 

(For Imported Goods)

(For Exported Goods)

1.

Japanese Yen

63.00

61.30

 

 
 

27 Jan, 2013


Revised import duty on edible oils

 Revised import duty on edible oils still to come into effect, oil traders continue import

The finance ministry's delay in issuing a notification regarding a revision in the import duty of edible oils has created confusion among the traders.Though the government has broadly said that a 2.5% import duty has been levied on crude edible oil, it has not spelt out whether the duty will be only on crude palm oil or all kinds of edible oils.As the duty is yet to come into effect, oil traders are importing huge quantities mainly from Malaysia and Indonesia at zero per cent duty.

 
 

27 Jan, 2013


IMPORT DUTY ON GOLD DORES HIKED TO 5%

The government on Tuesday raised the import duty on gold dore bars to 5% from 2%, following up on the hike in the customs duty on refined gold to 6% the previous day to contain a runaway current account deficit (CAD). However, industry executives say buyers may, at best, defer gold purchases for some time, but the decisions would not deter them in the medium term as the fundamental aspect of gold as a profitable investment tool and a hedge against inflation still stands. India, the world's biggest gold consumer, imports more than 800 tonne a year and dore — an alloy of gold and silver used by refineries to produce pure gold — accounts for slightly more than 10% of annual purchases from abroad. Tuesday's move was a natural option for the government to bridge the gap on import duties on bullion bars and dore, which had become an attractive import since April 2012 when the government doubled the tax on refined gold purchases from abroad to 4%.Most of the around 100 tonne dore imports are done by refiners such as MMTC, Rajesh Exports and PAMP.

 
 

23 Jan, 2013


The Last Date of Online Filing of the Return for 3rd Quarter of 2012-13 Extended

 The Last date for filing of Sales Tax Return IIIrd Qtr (2012-13) Extended to 1 Feb for online filing and hard copy send to 5th Feb.

 
 

22 Jan, 2013


Rate of exchange of one unit of foreign currency equivalent to Indian rupees

 S.O. (E). – In exercise of the powers conferred by section 14 of the Customs Act, 1962

(52 of 1962), and in super session of the notification of the Government of India in the Ministry of
Finance (Department of Revenue) No.1/2013-CUSTOMS (N.T.), dated the 3rd January, 2013 vide
number S.O.37(E), dated the 3rd January, 2013, except as respects things done or omitted to
be done before such super session, the Central Board of Excise and Customs hereby
determines that the rate of exchange of conversion of each of the foreign currency specified in
column (2) of each of Schedule I and Schedule II annexed hereto into Indian currency or vice
versa shall, with effect from 18th January, 2013 be the rate mentioned against it in the
corresponding entry in column (3) thereof, for the purpose of the said section, relating to
imported and export goods

 
Attachment:  1358847045.pdf
 

22 Jan, 2013


TDS Holders

 I, further, athorize ti}e Branch of Punjab & Sind Bank at Vyapar

"Bhawan, New Delhi ;fdr acceptance of TDS cheques from these contractees (TAN
Holders), who choo~eto pay through off -Iine mode .

 
Attachment:  1358846886.pdf
 

22 Jan, 2013


Delhi VAT Added Tax (Fourth Amendment) Act 2012

 

 
Attachment:  1358846739.pdf
 

22 Jan, 2013


Delhi VAT Added Tax (Fourth Amendment) Act 2012

 

 
Attachment:  1358846710.pdf
 

22 Jan, 2013


Delhi VAT Added Tax (Fourth Amendment) Act 2012

 

 
Attachment:  1358846685.pdf
 

22 Jan, 2013


SUPREME COURT REJECTS TAX EXEMPTION CLAIM OF AUSTRALIAN BRAND COOKIE MAN

 The Supreme Court on Monday ended a tax benefit for the Australian cookie brand, holding that branded goods cannot claim excise exemption meant for small-scale industry even if they are sold loose. Australian Foods India Private Limited, makers of Cookie Man cookies, has been claiming excise duty exemption meant for small scale industries on cookies sold at its retail counters without its packaging or brand name. Hearing an appeal by the revenue department against a tax tribunal decision to grant excise exemption to the company on cookies sold without the its brand name or logo, a two judge bench said physical branding of the good is not necessary to show that it was a branded product.

 
 

22 Jan, 2013


FOREIGN INVESTORS VS LOCAL TAXMEN

 The General Anti-Avoidance Rules (GAAR) have been de-mystified upon the issuance of the final report of the expert committee and its acceptance by the finance minister with certain variations.The final report carries the suggestions of the first draft with changes mainly in the following aspects. First, to ensure more independence in the functioning of the approving panel, the jurisdictional chief commissioner/commissioner would not sit in deciding a case where their direct subordinates were involved as assessing officers.Second, an appropriate mechanism has been recommended to be provided to ensure confidentiality of information of the taxpayer.

 
 

22 Jan, 2013


File your Income Tax Returns Online Till February 28

Here's some good news for those who are yet to file their income tax (I-T) returns electronically. The I-T department has said the time limit for filing ITR-Vs (income tax returns filed electronically without digital signature certificate) for assessment year 2010-11 (filed during FY 2011-12) and for ITRs of assessment year 2011-12 (filed on or after April 1, 2011) has been extended till February 28. For returns filed for assessment year 2012-13 for which ITR-V forms are yet to be received at the central processing centre and where the 120-day period has also lapsed, the date for filing ITR-Vs has been extended till March 31 or 120 days from the date of uploading the electronic return data, whichever is later.

 
 

22 Jan, 2013


Govt Imposes 2.5 pc Import Duty On Crude Edible Oils

The Union government has imposed a 2.5% import duty on crude edible oils to restrict overseas purchases and protect domestic oilseed growers. The import duty on refined varieties of palm oil, however, remains unchanged at 7.5% to check the prices. "The Cabinet has decided to levy these duties after an in-depth consultation. The move is likely to encourage oilseed growers," said food minister KV Thomas after the meeting of the Cabinet Committee on Economic Affairs. With the enhanced duty on crude palm oil, price payable to farmers will increase by around 150 per tonne. On the other hand, the impact of enhanced duty on prices of edible oils would be negligible at less than 1 per kg. 

 
 

04 Jan, 2013


Notification No.F.7(433)/Policy-II/VAT/2012/1068-78

 In exercise of the powers conferred under clause (a) of sub-rule (1) of rule 35 of the

Delhi Value Added Tax Rules, 2.005, I, Prashant Goyal, Commissioner, value Added Tax,
Government of National Capital Territory of Delhi, do hereby revoke the monetary limit of
'one thousand and five hundred rupees' prescribed vide notification No. F 2(5)/PII/VAT/Rules/2006/26 dated 25.04.2006 meanlnq thereby that an organisation listed in the
Sixth Schedule appended; to the Delhi Value Added Tax Act, 2004 shall now be eligible for
claiming refund of tax borne in respect of purchase made against a single tax invoice which
exceeds the amount of 'five thousand rupees' (excluding tax paid, if any) as prescribed in the
said clause

 
Attachment:  1357291847.pdf
 

04 Jan, 2013


Notificate No.F.7(453)/Policy/VAT/ 2012/1068-78

 No Security required for New DVAT Registration till 31.03.2012

 
Attachment:  1357291555.pdf
 

04 Jan, 2013


Notificate No.F.7(453)/Policy/VAT/ 2012/ J obg~ 7'l5

 

 
 

04 Jan, 2013


Notification No.F.7(433)/Policy-II/VAT/2012/1079-1090

 

 
Attachment:  1357290906.pdf
 

20 Aug, 2012


Notification No. F. 7/433/Policy-II/VAT/2012/ L, 72 - Y

Whereas, I, Rajendra Kumar, Commissioner, Value Added Tax, Government of National Capital Territory of Delhi, consider it necessary that \'tax rate wise details of closing stock as on 31st March of every year are submitted online by the dealers. \',- \" Now, therefore, in exercise of the powers conferred upon me by sub-section (1) read with sub-section (3) of section 70 of Delhi Value Added Tax Act, 2004, I direct that the tax rate wise details of closing stock as on 31st March shall be submitted by the dealers every year online, using their login :\':1 and password. For this purpose, Form Stock- 1 annexed with this Notification shall be used. The last date for filing of the rate wise details of closing stock as on the 31st day of March every year online, in form Stock-I, shall be the 30th day of June of the same year. However, information regarding the stock details as on 31/03/2012 should be furnished online latest by 31/10/2012.

 
 

20 Aug, 2012


Rajiv Gandhi Equity Scheme: Investments in MFs may qualify for tax sops

After the General Anti-Avoidance Rules (GAAR) and Retrospective Amendment, now the Rajiv Gandhi Equity Scheme is likely to be modified. All three were the key proposals of Pranab Mukherjee’s Budget presented on March 16 this year. The Finance Ministry has indicated that investment through mutual fund could also be allowed to take benefit of tax incentives in Rajiv Gandhi Equity Scheme. According to original proposal, investment in equity by the first time investor will be eligible for deduction up to Rs 25,000 from his taxable income. Any change in the Budget proposal will require moving an amendment in Parliament. Alternatively, as soon as the session is over, the Government can also bring in an Ordinance to effect the change.

 
 

20 Aug, 2012


Excise duty hike on diesel cars soon?

The government is examining proposals to increase excise duty on diesel cars, Parliament was informed today. In a written reply to a question in Rajya Sabha on whether the government is contemplating to increase excise duty on diesel cars, Minister of State Finance, S S Palanimanickam said, \"Representations have been received by the government for increasing excise duty on diesel cars. These are under examination\". He further said, \"The requests have been justified on the ground that diesel cars are more polluting and consume subsidised diesel providing unintended benefit to diesel car users\". The minister, quoting Society of Indian Automobile Manufacturers (SIAM) said the total number of petrol and diesel cars together sold in the domestic market in 2009-10, 2010-11, 2011-12 was 15.28 lakh, 19.73 lakh and 20.16 lakh respectively.

 
 

06 Aug, 2012


FILLING OF BALANCE SHEET AND PROFIT AND LOSS ACCOUNT BY COMPANIES IN NON-XBRL FOR ACCOUNTING YEAR COMMENCING ON OR AFTER 01.04.2011.

Notification no. S.O-447 (E) dated 28.02.2011 on revised schedule VI is effective from 1st April 2011. The current year filing is bases on revised schedule VI is due for filing. The revised from 23AC & ACA is under finalization and will be notified shortly on the MCA website. All Companies who are required to file non XBRL eform 23 AC & ACA as per revised schedule VI be allowed to file their financial statement without any additional fee/ penalty upto 15th September 2012 or with in 30 days from the date of their AGM, which ever is later.

 
 

06 Aug, 2012


IMPOSING FEES ON CERTAIN E-FORM FILED WITH ROC, RD OR MCA (HQ) UNDER MCA-21 WHERE AT PRESENT NO FEES IS PRESCRIBED

I am directed to refer to the Ministry\' General Circular no.14/2012 dated 21st June 2012 & General Circular no. 19/2012 dated 27th July 2012 and to say that fees on Form 23B (Information by statutory auditor to the Registrar) has been further deferred for one week and shall now be applicable from 12th August, 2012.

 
 

06 Aug, 2012


Order under Section 119 of the Income Tax Act. 1961

On consideration of the reports of disturbance of general life caused due to failure of power and further in consideration of the fact that the e-filing of returns for a specified category of individuals and HUF has been made mandatory, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income Tax Act, 1961, hereby extends the \'due date\' of filing of returns of income for the Assessment Year 2012-13 to 31st August 2012 in respect of assessees who are liable to file such returns by 31st July 2012 as per provisions of section 139 ofIncome Tax Act, 1961.

 
Attachment:  BreakingNews_Section119_31072012.pdf
 

12 Jul, 2012


Accounting Codes for Payment of Service Tax under Negative List (w.e.f. 01.07. 2012)

After the introduction of Negative List approach when category of taxable services are no more available, question arises regarding accounting code under which service provider is required to make payment of tax. This question is recently resolved by CBEC vide F.No.341/21/2012-TRU dated 6th July, 2012 by providing accounting codes applicable with effect from 1st July, 2012:- Name of Services Accounting codes Tax collection Other Receipts Penalties Deduct refunds All Taxable Services 00441089 00441090 00441093 00441094 This letter also clarifies that service specific accounting codes will also continue to operate for payment of service tax pertaining to period prior to 1st July, 2012. Here we would also like to mention that accounting codes for payment of Primary Education Cess and Secondary and Higher Education Cess will remain same.

 
 

12 Jul, 2012


Indirect taxes grow 14.8% in June

Indirect taxes collections rose 14.8% in June, 2012 indicating some pick up in industrial production that barely grew in April. But, this reasonable growth will not bring joy to the government that had anticipated indirect taxes to grow by over 26% in the current financial year. Excise duty collections , a barometer of manufacturing sector\'s performance, grew 13% in June to Rs 13,848 crore. The finance ministry, however, remains confident of a pick up in collections in coming months. \"We will achieve this year\'s indirect tax collection target of Rs 5.05 lakh crore\", a senior official said. Though part of the bouyancy in excise collections is because of the increase in rate of levy to 12% from 10%, it does suggest some pick up in factory output. The industrial production data is available only with a lag and the numbers for the month of May would be released on Thursday. Output of mines, utilities and factories had barely grown in April, rising only 0.1%.

 
 

30 Jun, 2012


Online submission of information regarding Central Declaration form

The dealers making stock transfer or central sales on concessional rate of tax are required to furnish Central Declaration Forms and are required to file a reconciliation return giving details of Central Declaration Forms furnished to the Department, Central Declaration Forms missing and tax deposited on account of the missing forms for every quarter. This reconciliation return is to be filed in form DVAT-51 within three months after the end of each quarter. However, it has been observed that some dealers do not submit all Central Declaration Forms together. Often, they file the Central Declaration Forms for a single quarter in several batches. In such cases, it becomes difficult to reconcile the central sale made with the Central Declaration Forms filed, necessitating appearance of dealer or his authorised representative before the Assessing Authority, even if all Central Declaration Forms for the entire stock transfer or central sales made on concessional rate of tax have been furnished. In order to obviate such inconvenience to the dealers, it has been decided to introduce the facility for online filing of information regarding Central\' Declaration Forms submitted, Central Declaration Forms missing and tax deposited on account of missing forms. This application can be accessed through the link titled \"Central Forms\" on dealer login page on the website of the Department www.dvat.gov.in. The department is currently in the process of short listing the cases which are required to be assessed on account of the missing Central Declaration Forms for the financial years 2009-10 and 2010-11. It is intended that the assessment of only those cases may be taken up where Central Declaration Forms have not been submitted for all, or part, of the stock transfer or central sales made. on concessional rate of tax. \" In order to ensure that nd; inconvenience is caused to the dealers, all dealers are requested to kindly furnish the quarter wise details of Central Declaration Forms submitted, Central Declaration Forms missing and tax deposited on account of the missing forms, online. The information furnished by the dealers online will be verified from the available records and electronic data received from other states; and default assessment will be framed only to the extent of missing and unverified Central Declaration Forms in respect of which due tax and interest has not been deposited by the dealers. However, in cases where no information is furnished online, it will be presumed, that no Central Declaration Forms have been submitted for the entire stock transfer or central sale made on concessional rate of tax and such cases will be assessed on priority basis. All registered dealers, who have made stock transfer or central sales on concessional rate of tax during 2009-10 and 2010-11, are requested to kindly file the requisite information online, positively by 20th July 2012, so as to avoid inconvenience, adverse assessment and penalty at a later date. The said link would be disabled after 20th July 2012.

 
 

30 Jun, 2012


DEPARTMENT OF TRADE AND TAXES (POLICY BRANCH)

GOVERNMENT OF NCT OF DELHI DEPARTMENT OF TRADE AND TAXES (POLICY BRANCH) VYAPAR BHAWAN, I.P. ESTATE, NEW DELHI-110002 After amendment in sub rule (1) of rule 26 of Delhi Value Added Tax Rules, 2005 vide notification dated 25/04/2012, the tax period for all dealers registered under Delhi Value Added Tax•Act has-become-\"either-monthly or quarterly with effect from 01/04/2012. Consequently, all registered dealers will be required to submit their DVAT/ CST returns for the tax periods June, 2012 or First quarter, 2012-13, by 28/07/2012. Since this is the first time that all registered dealers who filed half yearly or yearly returns till last year will be required to file quarterly returns, it may result in enhanced load on the Tax Professionals. In view of this, I, Rajendra Kumar Comrnissioner, VAT, in exercise of the powers conferred by virtue of rule 49A of the DVAT Rules, 2005,extend the last date of online filing of the return for the tax period of first quarter, 2012 and submission of the hard copy of the return as given below: Category Online filing Submission of hard of Dealers date copy of return All quarterly return filing dealers with odd 04/08/2012 07/08/2012 TIN that is TIN ending with 1,3,5,7 & 9 All quarterly return filing dealers with even 11/08/2012 14/08/2012 TIN that is TIN ending with 2,4,6,8 & 0 However, the tax due for the above mentioned tax period shall be deposited as per the provisions of Section 3(4) of the DVAT Act, 2004. Penalty on late deposit of tax due shall be imposed as applicable.

 
Attachment:  Cir20127438.pdf
 

25 Jun, 2012


CORPORATE & OTHER LAWS

Benami exemption list likely to be pruned The government is likely to curtail the list of entities exempted from the proposed Benami Transactions (Prohibition) Act to give more teeth to the new legislation. The move comes at a time when the government is under intense pressure to trace black, or untaxed, money of which benami deals are considered to be one of the main sources. The finance ministry has accepted suggestions made in this regard by the parliamentary standing committee on finance, headed by senior Bharatiya Janata Party leader Yashwant Sinha, a finance ministry official told ET.

 
 

25 Jun, 2012


Revenue dept: Armed to the teeth & ready for a fight

The armed forces might cease to be the exclusive domain of central and state home ministries. The revenue department is planning to a create a specialised cadre trained in advanced combat skills and equipped with state-of-the-art weapons to tackle the menace of smuggling. The the Central Board of Excise and Customs (CBEC) has sent a proposal to the home ministry in this regard. The idea is to raise a full cadre of armed revenue department officials for counter-smuggling operations in the wake of the rise in incidences of narcotics, currency, arms and ammunition and other contraband items being found in import and export cargo.

 
 

25 Jun, 2012


Traders face FMC rap for tax evasion

The commodity market regulator has cracked down on traders for misusing the client code modification (CCM) facility for tax evasion. \"Our vigilance system has made sure that no account transfers take place. Earlier, the penalty was nominal leading to huge trades. After a 1% penalty, members have become cautious,\" FMC chairman Ramesh Abhishek told ET. The enforcement division of the Forward Markets Commission (FMC) has found that members were misusing the CCM facility for transferring trades from one client account to another to save tax. The CCM tool is provided to members to rectify errors that slipped through while entering orders. But members were misusing it to transfer profits from a client\'s account to their own account and to move their losses to clients\' accounts.

 
 

23 Jun, 2012


SEZ policy to be revisited as growth in exports dips

With exports from special economic zones (SEZs) seeing a sharp decline and the number of applications for denotification of approved SEZs on the rise, the commerce ministry plans to revisit the SEZ policy to make establishment of such zones easier over smaller parcels of land, encourage optimal utilisation of land and help set up information technology SEZs in smaller cities and towns.The policy seeks to address the issue of sectoral broad-banding of SEZs to allow similar manufacturing and services sector industries to tap into the synergies arising from scale of operations and infrastructural requirements. According to the ministry, this approach balances the need to optimally use land with the requirements of economies of scale. It would cut transaction costs and time involved in setting up of units.In another proposed amendment, the ministry is mulling a differential incentives regime favouring the SEZs’ movement away from urban agglomerates and encourage such zones in the rural areas.

 
 

23 Jun, 2012


Does Budget provide reprieve to software cos from dual taxation?

The levy of indirect taxes on software in India is riddled with complexity and uncertainty. The taxation of software primarily depends on the treatment of software as “goods” or “services”, as the indirect tax treatment is different for the two. As a starting point, the industry relies on the Supreme Court ruling on a TCS sales tax dispute in 2005, which brought out principles on when software shall be treated as “goods”.In this backdrop, in May 2008, the Centre treated licensing of “electronic software” as “services” by levying service tax on the same. Therefore, the industry was faced with the imposition of dual levies on “electronic download of software”, the same being treated as goods as per the TCS judgment (and hence liable to VAT/CST) and the service tax law treating it as a service.

 
 

23 Jun, 2012


Rules on advance price agreement by July 1

Advance pricing agreement rules will be notified in a day or two because it has to be effective from July 1,” Gujral told FE on the sidelines of a conference.Earlier in the day, he said 76% of illicit fund outflow globally is through trade mis-pricing, that is, over-invoicing imports and under-invoicing exports. This is part of the larger issue of rising ‘aggressive tax avoidance’, which affects tax revenues.Gujral said the audit and preventive wings of the ministry have detected R27,000 crore of tax avoidance in central excise and sales tax last year, while it was R2,500 crore in customs.“In direct taxes, mis-pricing was detected on imports, exports and some other intangibles. Last year, it was above R42,000 crore. In the previous two years, it was R24,000 crore,” he said.“In the five-year period prior to that, it was 15,000 crore, which clearly suggests that it is increasing,” the finance

 
 

23 Jun, 2012


Refund excess tax despite 4 year limit period: CBDT to officials

Giving relief to taxpayers, the Income Tax Department has asked its officials to take action to refund excess tax even if such applications are hit by limitation period of four years.\"After due verification of any such claim on merits, the assessing officer shall issue refund of the excess amount, if any, so adjusted by CPC (Central Processing Centre at Bengaluru) due to inaccurate figures of arrear demand uploaded by the assessing officer,\" the Central Board of Direct Taxes (CBDT) said in a circular. The circular will also help tax officials in resolving disputes regarding arrear demands shown as outstanding against them in the records of assessing officer and refund the excess tax collected from them. In absence of the clarification, the officers could not have corrected or reconciled such disputed arrear demand due to limitation of four years.Also, in some cases, CBDT said the assessing officer have uploaded such disputed arrear demand on the Financial Accounting System (FAS) portal of CPC.This resulted in adjustment of refund arising out of processing of returns against arrear demand which has been disputed by assessees on the grounds that either such demand has already been paid or has been reduced in appeals, etc.

 
 

23 Jun, 2012


F.No. 437/16/2012-Cus. IV

F.No. 437/16/2012-Cus. IV Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs ***** New Delhi, dated the 20th June, 2012. ORDER In terms of Notification No. 15/2002-Customs (N.T.) dated 07.03.2002 (as amended) issued under sub-section (1) of section 4 of the Customs Act, 1962 (52 of 1962), the Board hereby assigns the Show Cause Notice F.No. DRI/MZU/NS/INV-02/10-11/2273-2284 dated 17.02.2012 issued by Additional Director General, Directorate of Revenue Intelligence, Mumbai Zonal Unit, Mumbai in the case of M/s Welspun Corporation Limited (formerly M/s Welspun Gujarat Stahl Rohren Limited), Mumbai and others, to the Commissioner of Customs (Adjudication), Mumbai for the purpose of adjudication. (Vikas) Under Secretary to the Government of India Copy to: 1. The Additional Director General, Directorate of Revenue Intelligence, Mumbai Zonal Unit, UTI Building, 113, Vithaldas Thackersey Marg, New Marine Lines, Churchgate, Mumbai-400020; 2. The Commissioner of Customs (Import), Kandla; 3. The Commissioner Of Customs (Export Promotion), New Custom House, Ballard Estate, Mumbai; 4. The Commissioner Of Customs (Adjudication), New Custom House, Ballard Estate, Mumbai; 5. Webmaster.cbec@icegate.gov.in.

 
 

20 Jun, 2012


Delhi govt notifies VAT cut on petrol

Petrol price in the national capital has come down by 92 paise a litre after the Delhi government on Monday notified a reduction in the effective value added tax (VAT) on the fuel. Diesel price, however, has gone up in the capital by 37 paise a litre as the state reversed its last year’s waiver of 12.5% VAT on the R3.37 hike on diesel price announced by the Centre.In the national capital, petrol would now cost R70.24 per litre from the earlier R71.16, while diesel would cost R41.28 a litre, up from the earlier R40.91.On June 4, the state assembly cleared its budget proposal to forgo the VAT component on the recent increase in petrol price announced by companies on May 23. After the moderate R2 a litre price reduction in petrol price announced by companies subsequently on June 4, the desired reduction in VAT has come to 92 paise.

 
 

20 Jun, 2012


Cement companies may face a Rs 3000 crore fine for forming cartels: CCI

India\'s competition watchdog may slap a fine of about Rs 3,000 crore on top cement companies, ruling them guilty of forming a cartel and fixing prices, in an order expected in a few days, official sources said.A top source in the Competition Commission of India (CCI) said the watchdog had the power to impose a fine of 10 per cent of the average turnover of a company in previous three years, but it would scale down the penalty as the economy was facing a slump and cement was a key input in critical sectors. \"Cement can affect market sentiments to a great effect. So, it was decided that we would impose a token punishment of 5-8 per cent of the past three years\' average turnover to send a stern signal to the guilty companies without hampering market sentiments,\" a top CCI official told ET.

 
 

20 Jun, 2012


Advance tax collections rise 4.9% to Rs 33,089 crore

Advance tax payments by India Inc grew by a meagre 4.9% in the three months to June, reflecting crimping growth and suggesting muted corporate profits in the days ahead. Preliminary data released by the finance ministry on Tuesday showed that companies paid Rs 33,089 crore as advance tax in the first quarter of the fiscal, compared with Rs 31,631.3 crore in the year-ago period. Payments by the country\'s top 100 companies rose 5.33% in April-June 2012 over the corresponding quarter of the previous fiscal. The data showed Reliance Industries, Bharat Heavy Electrical, Bharti Airtel, Steel Authority, Punjab National Bank and Larsen and Toubro paid lower tax in the quarter, an indication that slowdown was hurting industrial profits.

 
 

20 Jun, 2012


Notification No. 51/2012-Customs (N.T.)

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) New Delhi, dated the 15th June, 2012 Notification No. 51/2012-Customs (N.T.) G.S.R. 456 (E). – In exercise of the powers conferred by sub-sections (2) and (3) of section 75 of the Customs Act, 1962 (52 of 1962), sub-sections (2) and (2A) of section 37 of the Central Excise Act, 1944 (1 of 1944), and section 93A read with sub-sections (2) and (3) of section 94 of the Finance Act, 1994 (32 of 1994), read with rules 3, 4 and 5 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, the Central Government, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.68/2011-Customs(N.T.), dated the 22nd September, 2011 published vide number G.S.R. 712 (E) dated the 22nd September, 2011, namely:- In the said notification, in the Schedule, in Chapter 13, for tariff item 1302 and the entries relating thereto, the following tariff items and entries shall be substituted, namely :- “1302 Vegetable saps and extracts; pectic Substances, pectinates and pectates; Agar-agar and other mucilages and Thickeners, whether or not modified, Derived from vegetable products 130201 Guar Gum in any form Nil Nil 130299 Others 1% 1%” [F. No. 609/68/2012-DBK] (Rajesh Kumar Agrawal) Under Secretary to the Government of India Note: The principal notification No. 68/2011-Customs (N.T.), dated the 22nd September, 2011 was published in the Gazette of India, vide number G.S.R. 712(E), dated the 22nd September, 2011 Extraordinary, part II, Section 3, Sub-section (i) and was last amended vide notification No. 46/2012-Customs (N.T.) dated the 24th May, 2012 vide number G.S.R. 385(E), dated the 24th May, 2012.

 
 

20 Jun, 2012


Notification No. 41 /2012-Customs

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 41 /2012-Customs New Delhi, dated the14th June, 2012 G.S.R. In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 38/96-Customs, dated the 23rd July, 1996, G.S.R. 290(E), dated the 23rd July, 1996, namely:- In the said notification, against S.No.1, in column (2), in item (g), for the words “szaibelyite and goat cashmere”, the words “szaibelyite, goat cashmere, Readymade Garments, Shoes, Quilt/Blankets, Carpets and Local Herbal Medicines” shall be substituted. [F.No.354/57/2007 –TRU (Pt-I)] (Raj Kumar Digvijay) Under Secretary to the Government of India Note: - The principal notification No. 38/96-Customs, dated the 23rd July, 1996 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 290(E), dated the 23rd July 1996 and was last amended vide notification No.70/2006-Customs, dated 4th July, 2006, published Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 399 (E), dated the 4th July, 2006.

 
 

16 Jun, 2012


Commerce Ministry objects to lowering FDI cap for tower firms

The Commerce Ministry has objected to reducing the foreign direct investment cap for tower companies to 74 per cent.At present tower companies are allowed 100 per cent FDI but a new proposal to bring tower companies under the unified licence regime will make it mandatory for them to bring it down to 74 per cent. The Commerce Ministry has said the proposal will send wrong signals to foreign investors.“It is felt that a reduction in the FDI limit for infrastructure provider (IP-1) companies may not be an appropriate signal for investors in the telecom sector, in particular, and for foreign investors, in general at this stage, when India is actively seeking investments in infrastructure,” the Department of Industrial Policy and Promotion, under the Commerce Ministry, stated in a letter to the Department of Telecom.

 
 

16 Jun, 2012


EGoM says GSM entrants can bid for 6.25MHz of airwaves, new CDMA cos can bid for maximum of 3.75 MHz

The Empowered Group of Ministers, headed by Finance Minister Pranab Mukherjee, has decided that new entrants and companies that lost their mobile permits due to the Supreme Court ruling on February 2 can bid for a maximum of 6.25 MHz of airwaves in 1800 MHz band in the upcoming auctions. The 9-member EGoM, in its meeting on June 5, endorsed a telecom department\'s suggestion that new entrants be allowed to bid for 5 MHz of airwaves in the 1800 MHz band. But the panel also added a clause stating, \"new entrants will be allowed to bid for one additional block of 1.25 MHz\", according to the minutes of the meeting. Since airwaves will be sold in blocks of 1.25 MHz each, the likes of Telenor and Idea (in seven circles) can bid for a maximum of five blocks. As reported earlier by ET, existing operators or incumbents, in the GSM space can bid for a maximum of 2 blocks or 2.5 MHz of airwaves. In the CDMA space, companies like Sistema that lost its mobile permits, can bid for a maximum of 3 blocks (3.75 MHz) in the 800 MHz band, while existing operators will be allowed to bid for only one block.

 
 

16 Jun, 2012


Companies\' advance tax outgo up by 10 per cent in April-June quarter

Indian companies have reported an average increase of about 10% in advance tax outgo in the April-June quarter, according to sources in the income tax department. The increase in advance tax mop-up, which is a measure of companies\' performance, comes at a time the economy is faced with sluggish growth and currency depreciation.For fiscal 2012-13, the tax department has projected direct tax collection at Rs 5.70 lakh crore, up 15% from a year earlier. Companies pay advance tax in four installments - in June, September, December and March.It is the advance tax paid in December that usually gives a clearer picture of the revenue collection for the respective fiscal, even though some experts read a trend in the first installment in June. This year, during the April-June period, most corporates in banking, pharmaceutical, cement and financial sectors have paid more than what they had paid during the same period a year ago.

 
 

15 Jun, 2012


I-T to begin internal audits for better revenue collection

The Income Tax department is planning to start internal audits for its various tax collection arms after it was rapped by the CAG recently for non-recovery of tax arrears worth over Rs 4,500 crore from various entities. The tax department\'s idea through these audits is to plug any leakages owing to various reasons and better its revenue collection. The department would study the norms and practices followed for internal audit by diamond, construction, pharma and banking sectors in this regard.

 
 

15 Jun, 2012


Department of Telecom to bargain with telcos for lowering reserve price

The telecom department (DoT) has offered to reduce the reserve price for airwaves in the upcoming sale if existing mobile phone companies agree to match the auction-determined price for their frequencies over the remaining life of their licences.This proposal forms a key part of a package the DoT is attempting to cobble together to reach a settlement with companies that have vigorously opposed sector regulator Trai\'s controversial recommendations on pricing and refarming of spectrum.But the compromise attempt may not succeed as dual-technology companies such as Reliance Communications and Tata Teleservices are unhappy with the proposals. Reduction of the reserve price is a major demand of all telcos, but both Reliance Communications and Tata Teleservices have sharply criticised the DoT\'s plan to make incumbents pay the auction-determined price for their existing 2G airwaves over the remaining licence period.All telecom licences in the country are valid for 20 years, and unlike pure-play GSM operators like Bharti Airtel and Vodafone, the dualtechnology companies have more than 10 years to go before their permits expire.

 
 

15 Jun, 2012


Govt to remove multi-level TDS on software from July

In a big relief to the software industry, the government today said it will do away with the complex multi-level system of Tax Deduction at Source (TDS) for the sector from July 1. \"... No deduction of tax shall be made on... Payment by a person (transferee) for acquisition of software from another person (transferor), being a resident,\" the Finance Ministry said in a notification. The provisions will come into force from July 1, 2012, it said. Under the current structure, TDS of 10% is levied at every level of software distribution chain -- right from master distributor to retailer and then to the final consumer. Responding to the long-standing demand of the software sector, Finance Minister Pranab Mukherjee had last week said that Section 194J of the Income Tax Act, 1961, would be amended so as to avoid multi-level TDS on information technology sector.

 
 

15 Jun, 2012


Notification No. 39/2012-Customs

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 39/2012-Customs New Delhi, the 12th June, 2012 G.S.R. (E). - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the further following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2012-Customs, dated the 17th March, 2012 which was published in the Gazette of India, Extraordinary, vide G.S.R. 185(E) dated the 17th March, 2012, namely: - In the said notification, in the Annexure, in Condition No. 28, for the words “polyester made ups”, wherever they occur, the words “man-made made ups” shall be substituted. [F. No. 354/90/2012-TRU] [Raj Kumar Digvijay] Under Secretary to the Government of India Note.- The principal notification No. 12/2012-Customs, dated the 17th March, 2012 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 185(E) dated the 17th March, 2012, and was last amended vide notification No.31/2012- Customs, dated the 8th May, 2012, published vide number G. S. R. 338(E) , dated the 8th May, 2012.

 
 

12 Jun, 2012


Audit firms like E&Y, PwC and Protiviti Consulting ramp up hiring for internal audit and risk advisory functions

Rising governance issues in companies and increasing corporate frauds have led to a surge in demand for talent in the internal audit arm of audit firms and companies. Audit firms like Ernst & Young, PricewaterhouseCoopers (PwC) and Protiviti Consulting are ramping up hiring for internal audit and risk advisory functions. While the headcount at E&Y\'s internal audit arm has more than doubled to 1,250 from 600 over the past three years, the internal audit and risk advisory arm of PricewaterhouseCoopers has grown by 150% in terms of headcount over the past three years. Risk consulting and internal audit firm Protiviti Consulting has been growing at 40% year on year in terms of hiring since its inception in 2006. It hopes to maintain the same pace this year. Unlike statutory audit, which looks at the financial statements of companies as per accounting standards, has legal implications, is regulated by the Institute of Chartered Accountants of India, and is objective and external to a company, internal audit goes beyond numbers, and reviews all the internal processes and controls in a company and rectifies them with the business heads to mitigate risks.

 
 

12 Jun, 2012


‘Income tax revenue in Pune region up by 20% in 2011-12’

The growth in the corporate and individual incomes in Pune region, comprising Pune and Nagpur income tax (I-T) circles, led to the increase in income tax collections by nearly 20 per cent in 2011-12 compared to 2010-11. Income tax experts attribute this jump to the steep growth in corporate profits and general income in Pune region in the last three years. I-T officials said that not only was the increase significant in Pune district, but Nagpur also contributed sizeably to the growth in the I-T revenue.In financial year 2011-12, the contribution of Rs 1,11,22 individual income was much higher than the corporate income of Rs 1,08,17.

 
 

12 Jun, 2012


Indirect tax collections rise 16.1% in May

Indirect tax collections rose 16.1% in May from a year ago, suggesting a pickup in industrial activity after months of stagnation. Excise collections, an indicator of manufacturing by the factories, was up 16.2%, and even higher 17% in the first two months of the current year. A small 0.3% contraction in manufacturing in the last quarter of fiscal 2011-12 had pulled down overall GDP growth for the entire quarter to a nine-year low of 5.3%. The government will release the industrial production data for April on Tuesday, providing some indication of the industrial activity in the new financial year. Customs collections rose only 3% in June, suggesting a moderation in imports that could help bring down the current account deficit. Service tax collections were up 45.4%, well ahead of the 30% growth budgeted in 2012-13 by the government over the revised estimates of 2011-12.

 
 

11 Jun, 2012


Dumping duty imposed on gypsum boards from China, 3 other nations

The Finance Ministry has imposed provisional anti-dumping duty on imports of plain gypsum plaster boards fom China, Thailand, Indonesia and the UAE.Plain gypsum boards are referred to as standard gypsum boards, regular gypsum boards or gypsum boards in common trade parlance across the world. Such boards are used in interior construction in suspended ceiling and partition applications.This provisional anti-dumping duty will be valid for six months. The petition seeking anti-dumping probe on gypsum plaster boards was filed by Saint-Gobain Gyproc India Ltd. Both moisture resistant boards and fire resistant boards were excluded from the ambit of the anti-dumping probe.The provisional anti-dumping duty now imposed by the revenue department ranges from $7.25 per cubic metre to $51.70 per cubic metre depending on the exporter and the country of export.

 
 

11 Jun, 2012


Latest ‘sops\' will help exporters not exports hit by global recession

The Commerce Ministry has just released the annual supplement to the Foreign Trade Policy 2009-14 amidst a pervasive gloom over almost the entire global economy.The world economy has not been as low as now and that sentiment is also reflected in trade; world trade has been slowing after 2010, according to data from the World Trade Organisation. After a strong rebound from the Wall Street debacle in 2010 with 13.8 per cent expansion, world trade decelerated to 5 per cent in 2011 and in its forecast last year for 2012, the WTO rued a further fall to 3.7 per cent this year.As World Trade Organisation\'s Mr Pascal Lamy said while presenting the forecast for 2012, “More than three years have passed since the trade collapse of 2008-09, but the world economy and trade remain fragile. The further slowing of trade expected in 2012 shows that the downside risks remain high. We are not yet out of the woods”.

 
 

11 Jun, 2012


Late Demat conversion no ground for denial of capital gains: I-T Tribunal

A delay in transferring shares from the physical to demat form cannot be a cause for denying the benefit of tax-free long-term capital gains to an assessee. The ruling by the Pune income-tax tribunal could come as a relief to investors who have not dematerialised their shares in time, according to chartered accountants. The assessee, one Ajay Lalwani, purchased shares but did not open a demat account in time from the purchase date. Lalwani earned long-term capital gains on the sales of the shares but the assessing officer (AO) denied him the benefit of tax exemption under Section 10(38) on the ground that there was no concrete proof the shares were held for over a year.\" The AO also held that the transactions were pre-arranged to earn long-term capital-gains exemption. However, the Pune ITAT reversed the AO\'s decision, saying that a substantial delay in transferring shares into a demat account cannot be the ground for doubting the genuineness of a transaction and purchase date of shares. The tribunal observed that the assessee provided all the relevant details such as address of the company\'s registered office, signature of the authorised signatory along with signature of two directors, value of shares purchased, date of issue of certificate and certificate number, to the tax authority.

 
 

11 Jun, 2012


Notification No. 32/2012-Customs (ADD)

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 32/2012-Customs (ADD) New Delhi, 7th June, 2012 G.S.R.434(E).-Whereas in the matter of imports of Plain Gypsum Plaster Boards of all thicknesses and dimensions, excluding Gypsum Boards having water absorption up to and including 5%, generally referred to as Moisture Resistant Boards, and Gypsum Boards having a minimum breaking load of 24 Newtons in the transverse direction and 50 Newtons in the longitudinal direction per millimetre of thickness of the Board, characterized as Impact Resistant Boards or Fire Resistant Boards” (hereinafter referred to as the subject goods), falling under the heading 6809 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred as the said Customs Tariff Act), originating in, or exported from, China PR, Indonesia, Thailand, and UAE (hereinafter referred to as the subject countries) and imported into India, the designated authority in its preliminary findings vide, notification No. 14/45/2010-DGAD, dated the 19th March, 2012,published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 19th March, 2012, had come to the conclusion that- (i) the product under consideration had been exported to India from the subject countries below associated normal values, thus resulting in dumping of the product; (ii) the domestic industry had suffered material injury; (iii) the material injury to the domestic industry had been caused by the dumped imports from the subject countries, and had recommended imposition of provisional anti-dumping duty on the imports of subject goods, originating in, or exported from, the subject countries; Now, therefore, in exercise of the powers conferred by sub-section (2) of section 9A of the said Customs Tariff Act read with rules 13 and 20 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Central Government, on the basis of the aforesaid findings of the designated authority, hereby imposes on the subject goods, the description of which is specified in column (3) of the Table below, falling under sub-heading of the First Schedule to the said Customs Tariff Act as specified in the corresponding entry in column (2), originating in the country specified in the corresponding entry in column (4), exported from the country specified in the corresponding entry in column (5), and produced by the producer specified in the corresponding entry in column (6) and exported by the exporter specified in the corresponding entry in column (7), and imported into India, an anti-dumping duty equal to the amount indicated in the corresponding entry in column (8),in the currency as specified in the corresponding entry in column (10) and per unit of measurement as specified in the corresponding entry in column. Note: 1. - For the purposes of this notification Fire Boards, Fire Heat Boards, Impact Boards, Gypsum Ceiling Boards with Moisture Barrier, ECHO Boards, Heat Boards, Anti-mold Boards or Weather Boards, Thermal Boards, Gypsum Ceiling Boards with Aluminium Edges Sealed in White Film shall not be liable to pay anti-dumping duty. Note: 2. - The anti-dumping duty imposed under this notification shall be effective for a period of six months from the date of publication of this notification in the Official Gazette and shall be payable in Indian currency. Note: 3.- The rate of exchange applicable for the purposes of calculation of anti-dumping duty under this notification shall be the rate which is specified in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), issued from time to time, in exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and the relevant date for the determination of the rate of exchange shall be the date of presentation of the bill of entry under section 46 of the said Customs Act. [F.No.354/70/2012 –TRU] (Raj Kumar Digvijay) Under Secretary to the Government of India.

 
 

07 Jun, 2012


Pantaloon stock gains 18% in 3 days on stake sales

Shares of Pantaloon Retail, the largest listed retailer in the country, have gained nearly 18 per cent in the past three trading sessions, as two recent deals eased investors’ concerns about its heavy debt burden.On Wednesday, the Kishore Biyani-led firm’s shares rose 7.9 per cent, or Rs 11.95 to Rs 163.15, extending its winning streak. Pantaloon’s financial services affiliate Future Capital Holdings (FCH) had announced on Monday that Pantaloon and its unit Future Value Retail were selling 53.7 per cent stake in FCH to global private equity major Warbug Pincus. The deal was valued at around Rs 560 crore, or Rs 162 a share.Pantaloon shares had risen 17.5 per cent in the last three trading sessions, since Monday. The Future Capital stock, which closed almost flat at Rs 153.55 on Wednesday, had gained 12 per cent since the deal was announced on Monday. The deal with Warbug is expected to give relief to Pantaloon, which had been battling the mounting debt on its books.

 
 

07 Jun, 2012


Qualified foreign investors to get FII-like tax treatment

The gains made by qualified foreign investors\'s (QFIs) would be treated at par with the tax treatment available to the foreign institutional investors (FIIs), a senior official said. The Central Board of Direct Taxes (CBDT) is expected to clarify this shortly in order to eliminate a key grey area in the regulation of this new class of investors. “The CBDT will come out with a circular shortly. But the rules are very clear that for long-term capital gains, the QFI does not pay any tax in India, while for short-term capital gains they need to pay 15% tax,” the official said. Qualified depository participants will be required to deduct tax at source on the gains made by their QFI clients.Separately, the Securities and Exchange Board of India (Sebi) will soon come out with norms granting some flexibilities to QFIs in choosing custodians and brokers to route their investments.

 
 

07 Jun, 2012


Section 54 EC of I-T Act: Assessee, minor children eligible for separate tax exemption

The Kolkata Income Tax Tribunal has put to rest the vexatious issue of whether long-term capital gains (LTCG) earned by minors when clubbed with that of their parents are eligible for deduction separately under Section 54 EC of the Income-Tax Act. The clause exempts long term capital gains up to Rs 50 lakh if they are reinvested in prescribed securities. The tribunal ruled in favour of an assessee who earned Rs 5.5 crore long-term capital gains from the sale of shares of one Arc India. His daughter and son, both minors, earned Rs 49.47 lakh and Rs 39.5 lakh, respectively, from the share sales. The assessee invested Rs 50 lakh in Rural Electrification Corporation bonds in his name and the respective LTCGs earned by his minor children under their names. The assessing officer clubbed the long-term capital gains made by the assessee\'s minor children in his hands, but limited deduction under Sec 54 EC only to investment of Rs 50 lakh in the assessee\'s name. He disallowed deduction for investment in REC bonds made by the assessee\'s minor children on the ground that the upper limit of Rs 50 lakh applied to the aggregate amount of LTCG, including that of the parent and children. However, a division bench of the Kolkata ITAT ruled in favour of the assessee, saying that only the net taxable LTCG needs to be clubbed with the parent\'s income and not the gross LTCG as was done by the assessing officer.

 
 

06 Jun, 2012


CORPORATE & OTHER LAWS

FTP to impart competitiveness to exports: India Inc Exporters and India Inc alike gave the thumbs up to the Foreign Trade Policy (FTP), saying it will help impart competitiveness to exports. “The positive move of allowing duty-free scrips under export promotion schemes for payment of excise duty is worth special mention. This is indeed significant and will help exporters in procuring from domestic manufacturers,” said Ficci president RV Kanoria.Federation of Indian Export Organisations (FIEO) president Rafeeq Ahmed said the measures would have a lasting and positive impact on the country\'s trade.“In the wake of contraction of global demand and impending euro zone crisis , the support extended through the FTP is tremendous and will help in imparting competitiveness to exports.The announcements have exceeded our expectations. Labour intensive sectors like textiles have been the thrust area of the FTP,” Ahmed said.

 
 

06 Jun, 2012


Trade policy eyes 20% export growth with focus on investment, job creation

Ruing the prevalent “crisis period” that could turn out to be “very testing”, contraction in global demand and a slippage in fixed capital formation in the economy to less than 30% of GDP, the government on Tuesday undertook another annual review of its five-year Foreign Trade Policy (2009-14), with the focus on spurring investment, job creation and catalysing market diversification by exporters. Acutely aware of the high trade and current account deficits, the government also made a half-hearted attempt to curb imports by promoting import substitution and retained the 2% interest benefit for exporters in labour-intensive sectors for another year (till March 2013), besides extending it to more areas. Although commerce and industry minister Anand Sharma, who announced the policy changes, refrained from quantifying the additional benefits to exporters, he said these were substantial and “well-considered interventions” given the Centre\'s fiscal stress. Setting a difficult target of a 20% increase in exports to $360 billion in the current fiscal (exports grew 21% in 2011-12 to touch $304 billion), Sharma promised to bring life back to special economic zones (SEZs) by “re-visiting certain aspects” of the relevant policy, adding the 100% export-oriented unit (EOU) scheme, which has lost sheen after the withdrawal of income tax exemption, would be revamped in the next few months.

 
 

06 Jun, 2012


Supplement to foreign trade policy: 7-point agends to boost exports

The government has unveiled a seven-point strategy, including extension of import-tax waiver and interest subsidy, to boost India\'s merchandise exports that have been hit by sluggish demand from Europe and US. The annual supplement to the five-year foreign trade policy announced on Tuesday enlarged the scope of tax benefits on imported inputs to include goods sourced locally, aimed at incentivising domestic manufacturing while encouraging import substitution. It also extended the interest subsidy scheme on labour intensive exports by a year to March 2013; declared seven countries as focus markets; offered special sops for export units in the North-East; and made e-commerce and courier exports out of Delhi and Mumbai eligible for the export benefits. The package will help achieve the target growth of 20% over the previous fiscal\'s $303 billion exports despite a weak start, commerce and industry minister Anand Sharma said after releasing the supplement.

 
 

06 Jun, 2012


NO I-T RETURNS FOR PERSONS TAKING NEW QFII ROUTE

Foreign individual investors and trusts entering the Indian capital market under the new Qualified Foreign Institutional Investors Framework may not be required to file an income-tax return with the finance ministry looking at ways to give a boost to the scheme. The government is looking at various measures, including some tax-related issues, to make the scheme more attractive, \"a finance ministry official said after a meeting with representatives from capital markets. The finance ministry may allow setoff of profits against losses in tax computation for witholding tax for transactions over a month, authorising qualified depository participants to deduct witholding tax and removing the need to file an income-tax return.

 
 

05 Jun, 2012


Public Accounts Committee may look at public-private partnership projects, too

The Public Accounts Committee (PAC) wants to expand its ambit by going beyond the Comptroller and Auditor General\'s (CAG) reports.The Parliament\'s financial watchdog, which is entrusted with overseeing Government spending, wants to also look into government expenditure in all its forms. “This panel can look at the government expenditure in any form. There are suggestions to look at various public private partnership (PPP) projects, like airport modernisation and building of roads etc. Some members also wanted to have a look at the impact of the decision to decontrol petrol on public sector oil companies,” a member of the panel said.The first meeting of this year\'s PAC, which was held here on Friday, entrusted the Chairman, Dr Murli Manohar Joshi, the task of finding new subjects for the panel.This year\'s PAC will have to go through controversial audit reports on Devas spectrum deal and Adarsh scam. Other than this, reports on coal scam, Delhi airport modernisation and ultra mega power projects are ready to be tabled in Parliament.

 
 

05 Jun, 2012


Value added tax dropped for common man: Sheila Dikshit

The proposal to impose 5% value added tax on CNG has been dropped by chief minister Sheila Dikshit. She also withdrew the proposal to levy 5% VAT on textiles costing above Rs 300 per metre, garment sets priced above Rs 600 and sarees costing above Rs 1,000 to \"protect\" the textile industry in the city. To project budget 2012-13, which was passed in the Delhi assembly on Monday as \"people friendly\", and in an attempt to woo the urban voter reeling under the impact of inflation, Dikshit announced that the government\'s proposal to introduce VAT on CNG has been dropped keeping the interests of the common man in mind. In her budget speech, Dikshit had stated that VAT on CNG would have brought the state exchequer around Rs 110 crores of revenue. During the Delhi bandh by the BJP on Thursday, the opposition had demanded withdrawal of the proposal of VAT on CNG and a rollback on petrol prices. While the CM had vehemently labeled the bandh a failure and asserted that she had no plans to withdraw the proposal of imposing of 5% VAT on CNG, Dikshit had to give in to her own party men who were critical of her proposal. MLAs had expressed fears that hike in price of the fuel would have a negative effect on the party ahead of next year\'s polls.

 
 

05 Jun, 2012


Finance ministry mulls hike in excise duty on diesel vehicles

Unable to bite the bullet on diesel subsidies, the finance ministry is now looking to raise excise duty on vehicles using the subsidised fuel to discourage consumption of the fuel and bolster its tax revenues. \"The proposal is there and that is being examined by finance minister (Pranab Mukherjee). Consultations are being held and an appropriate decision will be taken by the government in due course,\" the Central Board of Excise and Customs (CBEC) Chairman S K Goel told reporters here. The proposal had been mooted by the petroleum and natural gas ministry ahead of the budget but the finance ministry opted for an across-the-board increase of 2% in excise duty to 12% instead.The petroleum ministry has for long argued that the rich should not get subsidised fuel. According to ministry estimates, 15% of diesel consumption is accounted for by personal cars and SUVs. Petrol cars of engine capacity under 1,200 cc and diesel cars under 1,500 cc attract an excise duty of 12%.The duty on such cars with length exceeding four metres is 24%. Petrol and diesel driven vehicles having length exceeding four metres and engine capacity of over 1,200 cc and 1,500 cc, respectively, attract an ad valorem duty of 27% and a specific duty of 15,000.

 
 

04 Jun, 2012


Casting the tax net wide

In a bid to defend the tax proposals of Budget 2012, in particular the retrospective amendments, the Finance Minister, Mr Pranab Mukherjee, declared that “India is not a tax haven”, nor is it desperate for foreign investment at any cost. He also reminded the Lok Sabha that “when investment was not there we did not eat lizards”.The Finance Minister\'s words bring to fore the country\'s battle to halt the erosion of its national tax base. This is a challenge faced by many developing countries in the global marketplace, where key resources such as labour and capital have increasingly become mobile and are drawn into tax havens, which grant individuals or corporations the opportunity to escape tax in their country of origin.Today, there is increasing competition between nations over collection of tax. Taxation is a sovereign right. Nations zealously guard their right to tax all entities within their jurisdiction, and India is no exception. For determining tax jurisdiction, two connecting factors have been accepted universally — residence-based taxation, which is favoured by capital exporting countries, and source-based taxation, which is favoured by developing or capital importing countries. India adopts residence-based taxation for its residents (global income is taxed in India) and a source-based taxation for non-residents (only on income received or accruing in India).

 
 

04 Jun, 2012


Retrospective taxation likely to spare most foreign M&A deals

The controversial provision to retrospectively tax indirect transfer of Indian assets through deals executed overseas is likely to spare a large number of transactions by excluding those where the Indian assets account for less than half the total deal size. The retrospective amendment to the Income-Tax Act, part of this year\'s budget and which most tax experts say is targeted at Vodafone Plc, says overseas acquisitions and mergers that involve \'substantial\' Indian assets will be taxed here. It does not define \'substantial\'. \"It (substantial) could be defined as more than 50%,\" a finance ministry official told ET. The finance ministry has begun internal discussions on administrative guidelines to be issued in the form of a circular to provide clarity on how such transactions will be dealt with by the tax authorities. The clarification is intended to reassure edgy foreign investors, including foreign institutional investors and private equity investors, and also help improve the overall investment climate.

 
 

04 Jun, 2012


RELEVANT TAX CASES INCOME TAX

1. Sec. 12A registration is not subordinate to ability of applicant for sec. 11 exemption In the instant case the tribunal has examined that whether the question of exemptions under sections 11 and 12 of the Act can be raised before grant of registration. The Tribunal in this regard held that: a) the question of exemption under section 11 and 12 would come only when the said exemptions are claimed by the trust at the time when it is assessed to tax; b) language of the section 12AA does not show that in order to be able to get registration, there is necessity of first establishing as to how the concerned institution would be able to claim the exemptions under section 11 or 12 of the Ac. Hence to get registration, it is not necessary to first establish that the institution would be able to claim the exemptions under Section 11 or 12 of the Act - TISHIR SHIKSHA PRASAR SAMITI v. CIT [2012] 21 taxmann 525 (Agra - Trib.) 2. No deduction denial u/s 80AC where delay in filing return of 74 days is due to loss of data on account of virus attack • The assessee had given reasons for delay in filing the return of income that it was preparing its accounts through computer and the computer got corrupted due to viruses and in spite of continuous efforts by the computer technical personnel to retrieve the data in time for filing the return of income, problem persisted in the system. The entire data for the two months period, February and March, 2008, had to be re-entered into the computer system again. On preparation of the final accounts and finalising of statutory audit it took a little extra time that resulted in belated filing of return of income. Thus there was a delay of 74 days in filing the return of income which was beyond the control of assessee. This was also confirmed by the statutory auditor vide his letter dated 20-3-2011. It was held that there was a reasonable cause for filing the return of income belatedly and this was beyond the control of the assessee. When the substantial question of justice is involved technicalities should be ignored - [2012] 22 taxmann 2 (Hyderabad - Trib.)

 
 

04 Jun, 2012


Circular No.09 / 2012 – Customs

Circular No.09 / 2012 – Customs F. No. 528/11/2012-STO (TU) Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs 229A, North Block, New Delhi, 23rd March, 2012. To All Chief Commissioners / Commissioner of Customs / Customs (Prev.) All Chief Commissioners / Commissioner of Customs & Central Excise All Commissioners of Customs (Appeals) All Commissioners of Customs & Central Excise (Appeals) All Directors General under CBEC. Subject: Applicability of exemption under Sr. No. 4 of the Notification 4 / 2006 - CE dated 1/3/2006 on import of Ore Concentrates - regarding. **** Sir / Madam, Doubts have been raised whether on imports of Ore Concentrate classifiable under Chapter 26 of the First Schedule to the Customs Tariff Act, 1975, the benefit that is admissible to “Ore” under Serial Number 4 of the Notification No. 4/2006 – CE dated 1.3.2006 can be granted to the “Concentrate” of that Ore. The issue was taken up for discussion during the Conference of Chief Commissioners of Customs on Tariff and allied matters held in May 2011. 2. The matter related to: (a) whether the term ‘Ore’ includes Concentrate, and (b) Whether insertion of Chapter Note 4 in the Chapter 26 will have any impact on the admissibility of notification benefit to Concentrates, was examined. The Conference noted the HS definitions of Ore and Concentrate are as follows: “The term ‘ore’ applies to metalliferous minerals associated with the substances in which they occur and with which they are extracted from the mine; it also applies to native metals in their gangue (e.g. metalliferous sands”). “The term ‘concentrates’ applies to ores which have had part or all of the foreign matter removed by special treatments, either because such foreign matter might hamper subsequent metallurgical operations or with a view to economical transport”. It was also seen that the recent changes in the Central Excise Tariff treating the concentration of ore as amounting to manufacture would not in any way change the definition of Ore or Concentrate for the purpose of classification. This has been reiterated in a number of judgments and also vide Board Circular No.696/12/2003 – CX dated 26.2.2003. 3. In view of Chapter Note 4 to Chapter 26 of CETA, 1985 inserted vide Finance Act 2011, Ores and Concentrates are two distinct products. Thus, Concentrates suffer Central Excise duty being a manufactured product. The implication for imported Concentrates is that the benefit of exemption of additional duty of Customs leviable under Section 3 of Customs Tariff Act, 1975 in terms of a notification that applies only to Ores is no longer available to Concentrates, even if Concentrates and Ores fall under the same tariff heading. 4. Thus, it is concluded in the Conference that the benefit of exemption notification under Sr. No. 4 of the Notification 4/2006-CE dated 1.3.2006 will be available only to imported Ores and not to imported Concentrates. 5. Suitable instructions may be given to the field formation and all pending assessments, if any, may be finalized accordingly. Difficulty faced, if any, may be brought to notice of the Board. Yours faithfully, (Subodh Singh), OSD (Customs), Tariff Unit, Fax-011-23092173 ----X----

 
 

04 Jun, 2012


Circular No. 13/2012-Customs

Circular No. 13/2012-Customs F. No. 528/21039/08-Cus/ICD Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs *** New Delhi, dated the 8th May, 2012 To All Chief Commissioners of Customs/ Customs (P), All Chief Commissioners of Customs & Central Excise, All Director Generals/Chief Departmental Representatives (CESTAT), All Commissioners of Customs / Customs (P), and All Commissioners of Customs & Central Excise. Sir/Madam, Subject: Enforcement of Intellectual Property Rights on imported goods - Clarification on the issue of parallel imports – regarding. *** I am directed to invite your attention to the Notification No.51/2010-Customs (N.T.) dated 30.6.2010 and Board’s Circular No. 41/2007-Customs dated 29.10.2007 prescribing certain conditions and procedures in implementation of Intellectual Property Rights (IPR) such as trade mark, design, patent, geographical indication and copyright under the IPR (Imported Goods) Enforcement Rules, 2007. In this regard, certain representations have been received in the Board from the trade as well as the field formations seeking clarification on the matter of import of original/genuine products (not counterfeit or pirated) which are sold/ acquired legally abroad and imported into the country, by persons other than the intellectual property right holder without permission/authorisation of the IPR holder, which in trade parlance is known as ‘parallel imports’. 2.1. It may be recalled that the notification No.51/2010-Customs (N.T.) dated 30.6.2010 prohibits import of goods for sale or use in India, which are covered under specified legal provisions of the following statutes that regulate products with false trade mark, fraudulent or obvious imitation of design, patent obtained without consent, false Geographical indication or product which infringe registered copyright etc. (i) Trade Marks Act, 1999 (ii) Designs Act, 2000 (iii) Patents Act, 1970 (iv) Geographical Indications of Goods (Registration and Protection) Act, 1999 and (v) Copyright Act, 1957. 2.2. In terms of the legal provisions under the IPR (Imported Goods) Enforcement Rules, 2007 read with notifications and circulars issued in this regard, the determination of the fact that whether particular consignment of imported goods infringes the rights of the IPR holder would be done by the Customs authorities taking into account the provisions of the aforesaid parent Acts. 2.3. It may also be noted that all infringements and consequential offences stated in the aforesaid parent Acts is not limited to import of goods, as the scope of these Acts are wide, interalia, covering enforcement of the legal provisions of these Acts in the country. Hence, it may be noted that the prohibition of imported goods for the purpose of protecting intellectual property rights as specified under Notification No.51/2010-Customs (N.T.), does not relate to all infringements under the parent Acts but only to those imports that infringe the specific provisions of various parent Acts governing IPR, mentioned in the notification No.51/2010-Customs (N.T.). 2.4. To illustrate, in case of the Trade Marks Act, 1999, prohibitions against infringement of trade marks on import of goods intended for sale or use in India, that attract the provisions IPR (Imported Goods) Enforcement Rules, 2007, have been given in para (i) and (ii) of aforesaid notification, viz,: (i) imported goods having applied thereto a false trade mark, as specified in section 102 of the Trade Marks Act, 1999 [for para (i)] (ii) imported goods having applied thereto any ‘false trade description’ within the meaning of definition provided in clause (i), in relation to any of the matters connected to description, statement or other indication direct or indirect of the product but not including those specified sub- clauses (ii) and (iii) of clause (za), of sub-section (1) of section 2 of the Trade Marks Act, 1999[for para (ii)]. Thus, the prohibition under the para (i) and (ii) of aforesaid Notification No.51/2010-Customs (NT) would be applicable only when the imported goods fall within the purview of the above referred provisions of Trade Marks Act, 1999. 3. In this context, the issue of permitting import of original/genuine products (not counterfeit or pirated) which are sold/ acquired legally abroad and imported into the country, by persons other than the intellectual property right holder without permission/ authorisation of the IPR holder, known in the trade as ‘parallel imports’ was referred to the administrative Ministry i.e., Department of Industrial Policy and Promotion (DIP&P), Ministry of Commerce & Industries, seeking their clarification. 4. In this regard, the Department of Industrial Policy and Promotion which is nodal authority for all matters relating to (i) Trade Marks Act, 1999 (ii) Patents Act, 1970 and (iii) Designs Act, 2000 has, interalia, stated that: (i) Section 107A (b) of the Patents Act, 1970 provides that importation of patented products by any person from a person who is duly authorised under the law to produce and sell or distribute the product shall not be considered as an infringement of patent rights. Hence, in so far as Patents are concerned, Section 107A (b) provides for parallel imports. (ii) Section 30(3)(b) of the Trade Marks Act, 1999 provides that where the goods bearing a registered Trade Mark are lawfully acquired, further sale or other dealing in such goods by purchaser or by a person claiming to represent him is not considered an infringement by reason only of the goods having been put on the market under the registered Trade Mark by the proprietor or with his consent. However, such goods should not have been materially altered or impaired after they were put in the market. (iii) In so far as designs are concerned, it is clarified that parallel imports are not allowed as indicated by Section 22 (1)(b) of the Designs Act, 2000. (iv) As regards geographical indications, it is stated that there are no identical or similar provisions as in Section 107A(b) of Patents Act, 1970 on parallel imports under the Geographical Indications of Goods (Registration and Protection) Act, 1999. The said Act does not address the issue of parallel import at all. Hence, parallel imports are not covered under this Act. (v) As regards ‘copyright’ since the clarification is awaited from the nodal authority i.e., Department of Higher Education, the field formations may follow the extant provisions of the Copyright Act, 1957 until further instructions are issued in this regard. 5.1. In view of the above, the field formations are directed to decide cases of import of ‘parallel imports’ on the basis of aforesaid legal provisions of parent Acts, the provisions of Notification No. 51/2010-Customs(N.T.) dated 30.6.2010 and the clarification given by the administrative Ministry as detailed in para 4 above. 6. The above instructions may be brought to the notice of all concerned immediately and wide publicity of this circular may given through appropriate Public Notice. 7. Receipt of this Circular may kindly be acknowledged. (M. Satish Kumar Reddy) Director (ICD)

 
 

02 Jun, 2012


Notification No. 29 /2012-Customs (ADD)

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 29 /2012-Customs (ADD) New Delhi, dated the 29th May, 2012 G.S.R. (E) Whereas, the designated authority vide notification No. 15/2/2011-DGAD, dated the 15th April,2011, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 15th April,2011, had initiated review in terms of sub-section (5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the said Customs Tariff Act) and in pursuance of rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the said rules), in the matter of continuation of anti-dumping duty on imports of Acetone, falling under Chapter 29 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), originating in, or exported from, Chinese Taipei, imposed vide notification of the Government of India, in the Ministry of Finance (Department of Revenue),No. 33/2008-Customs, dated the 11th March, 2008, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R.174 (E), dated the 11th March, 2008, and had recommended withdrawal of the said anti-dumping duty vide notification No. 15/2/2011-DGAD, dated the 10th April,2012, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 10th April, 2012, Now, therefore, in exercise of the powers conferred by sub-section (1) and sub-section (5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975), read with rules 18 and 20 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Central Government hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 33/2008-Customs, dated the 11th March, 2008, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 174 (E), dated the 11th March, 2008, except as respects things done or omitted to be done before such amendment, namely:- In the said notification, in the Table, - (i) Sl. No. 1 and the entries relating thereto shall be omitted; (ii) Sl. No. 2 and the entries relating thereto shall be omitted; (iii) Sl. No. 3 and the entries relating thereto shall be omitted; (iv) Sl. No. 4 and the entries relating thereto shall be omitted; (v) Sl. No. 5 and the entries relating thereto shall be omitted. [F.No.354/65/2007 –TRU (Pt-I)] (Raj Kumar Digvijay) Under Secretary to the Government of India Note. - The principal notification No. 33/2008-Customs dated the 11th March, 2008, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i),vide number G.S.R 174 (E), dated the 11th March, 2008.

 
 

02 Jun, 2012


Notification No. 28/2012-Customs (ADD)

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 28/2012-Customs (ADD) New Delhi, dated the 21st May, 2012 G.S.R.377 (E). -Whereas, the designated authority vide notification No. 15/13/2011-DGAD, dated the 9th April, 2012, published in Part I, Section 1 of the Gazette of India, Extraordinary, dated the 9th April, 2012, had initiated review, in terms of sub-section (5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975) and in pursuance of rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the said rules), in the matter of continuation of anti-dumping duty on imports of ‘White Cement’, originating in, or exported from, UAE and Iran imposed vide notification of the Government of India in the Ministry of Finance (Department of Revenue), 56/2007-Customs, dated the 12th April, 2007, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 288 (E), dated the 12th April, 2007, and had requested for extension of anti-dumping duty upto one more year, in terms of sub-section (5) of Section 9A of the said Customs Tariff Act; Now, therefore, in exercise of the powers conferred by sub-sections (1) and (5) of Section 9A of the said Act and in pursuance of rule 23 of the said rules, the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), 56/2007-Customs, dated the 12th April, 2007, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 288(E), dated the 12th April, 2007, namely: - In the said notification, after para 2, the following shall be added, namely: - “3. Notwithstanding anything contained in para 2 this notification shall remain in force up to and inclusive of the 11th day of April, 2013, unless revoked earlier”. F.No.354/27/2001-TRU (Pt-II) (Raj Kumar Digvijay) Under Secretary to the Government of India

 
 

02 Jun, 2012


RELEVANT TAX CASES INCOME TAX

1. DVO not barred u/s 55A from continuing valuation proceedings after passing of assessment order in the case for which DVO\'s report was required • Valuation proceedings u/s 55A continuing after making of assessment order would not be quashed by High Court on the plea that the proceedings serve no useful purpose once assessment order is made for the following reasons : • There is no provision in the Act which says what would happen to a reference made to the DVO under section 55A which is pending completion at the time of passing the assessment order. Obviously the assessment order cannot be deferred in view of the limitation prescribed for passing the same. • The report of the DVO, as and when received by the Assessing Officer, may be acted upon by the income tax authorities and if they do so, the validity of that action can be questioned by the assessee on grounds which he may be advised to take. • Court would not be justified in preventing the Assessing Officer from collecting evidence which may be used by him for the purpose of bringing what in his opinion is the proper amount of capital gains on the sale of asset. • As to how he proposes to use the evidence against the assessee is a matter of speculation which High Court should not indulge in - [2012] 21 taxmann 488 (Delhi).

 
 

02 Jun, 2012


CBDT Instruction On Grant Of TDS Credit For AY 2011-12

Instruction No. 4/2012 [F. No. 225/34/2011-ITA.II], dated 25-5-2012 The Board has decided to withdraw Instruction no. 01/2012 issued on 2nd February, 2012 on the subject above with immediate effect. The following decisions have been taken in this regard. (i) In all returns (ITR-1 to ITR-6), where the difference between the TDS claim and matching TDS amount reported in AS-26 data does not exceed Rs. Five thousands, the TDS claim may be accepted without verification. (ii) Where there is zero TDS matching, TDS credit shall be allowed only after due verification. (iii) Where there are TDS claims with invalid TAN, the TDS credit for such claims is not to be allowed. (iv) In all other cases TDS credit shall be allowed after due verification.

 
 

18 May, 2012


Notification No. 36/2012-Customs

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 36/2012-Customs New Delhi dated the 14th May, 2012 G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 10/2008-Customs, dated the 15th January, 2008 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 33(E), dated the 15th January, 2008, namely:- In the said notification, in the Table, after serial number 532, the following serial number shall be inserted, namely: - (1) (2) (3) (4) “533 96190010 All goods 6.67%” [F.No. 354/9/2004-TRU (Pt.II)] (Raj Kumar Digvijay) Under Secretary to the Government of India Note.- The principal notification No. 10/2008-Customs dated the 15th January, 2008 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 33(E), dated the 15th January, 2008 and was last amended by notification No.106/2011-Customs, dated the 1st December, 2011 which was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i) vide number G.S.R 856 (E), dated the 1st December, 2011.

 
 

18 May, 2012


Notification No. 33/2012-Customs

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 33/2012-Customs New Delhi dated the 14th May, 2012 G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.73/2005–Customs, dated the 22nd July, 2005 which was published in the Gazette of India, Extraordinary, vide number G.S.R.498(E), dated the 22nd July, 2005, namely:- In the said notification, for the Table, the following Table shall be substituted, namely: - “Table S.No. Heading, sub-heading or tariff item Description of goods (1) (2) (3) 1 10029000 All goods 2 1003 All goods 3 1004 All goods 4 100810 All goods 5 10083010 All goods 6 100840 to 100890 All goods 7 250300 All goods 8 27160000 All goods 9 28012000 All goods 10 280130 All goods 11 2802 All goods 12 2804 (except 28042100) All goods 13 2805 All goods 14 28100010 All goods 15 28112990 Suphur dioxide 16 28121050 All goods 17 28153000 All goods 18 28251010 All goods 19 28252000 All goods 20 282530 All goods 21 28254000 to 282570 All goods 22 282590 All goods 23 28311020 All goods 24 283190 All goods 25 28372010 All goods 26 28372050 All goods 27 28372090 All goods 28 28429090 Fluminates 29 28433000 All goods 30 284990 All goods 31 2852 10 00 Mercury oxide 32 29011000 All goods 33 29012100 All goods 34 29012400 All goods 35 290129 All goods 36 29021100 All goods 37 29021900 All goods 38 29025000 All goods 39 29033100 Fluorinated derivatives 40 29033919 Fluorinated derivatives 41 29033920 All goods 42 29033930 All goods 43 29051990 Pentanol (amyal alcohol) and isomers thereof 44 290522 All goods 45 29052900 All goods 46 29061100 All goods 47 29062100 All goods 48 290629 All goods 49 29101000 All goods 50 29121200 to 29122990 All goods 51 29124100 to 29124200 All goods 52 29125000 to 29126000 All goods 53 29141200 to 29141300 All goods 54 291423 to 291439 All goods 55 29145000 All goods 56 29161100 to 29161400 All goods 57 29181400 All goods 58 29309010 to 29309070 All goods 59 300660 All goods 60 38062000 All goods 61 380690 All goods 62 38159000 All goods 63 381800 All goods 64 39071000 All goods 65 39074000 All goods 66 391110 All goods 67 391212 All goods 68 391239 All goods 69 39129010 to 39129020 All goods 70 39139011 All goods 71 4101 to 4103 All goods 72 41041900 to 41044900 All goods 73 41064000 All goods 74 41071900 to 41120000 All goods 75 41133000 to 41141000 All goods 76 41151000 All goods 77 43013000 All goods 78 43021990 Tanned or dressed, unassembled, furskins of lamb, the following: Astrakhan, Broad tail, Caracul, Persian and similar lamb, Indian, Chinese, Mongolian or Tibetan lamb (without the addition of other materials) 79 47063000 Chemical pulp 80 47063000 Chemical pulp 81 47069200 All goods 82 49021010 to 49029020 All goods 83 49040000 to 49060000 All goods 84 70200011 to 70200019 All goods 85 84433210 to 84433260 All goods 86 84433290 Teleprinters 87 84433920 All goods 88 84433940 All goods 89 84433960 All goods 90 84439951 All goods 91 84439953 All goods 92 84453090 All goods 93 84479020 to 84479030 All goods 94 84569010 All goods 95 84701000 All goods 96 84702900 All goods 97 84705010 to 84719000 All goods 98 84729030 All goods 99 84732100 to 84733040 All goods 100 84733091 to 84733099 All goods 101 84735000 All goods 102 84862000 Direct write-on-water apparatus 103 84862000 Step and repeat aligners 104 84862000 Other apparatus for projection/drawing of circuit patterns on sensitized semi conductor materials 105 85044029 Static converters for automatic data processing machines and units thereof, and telecommunication apparatus 106 85045090 All goods 107 85171110 All goods 108 85171190 All goods 109 85171210 to 85171290 All goods 110 85171810 to 85171890 All goods 111 85176210 to 85176270 All goods 112 85176290 Telephonic or telegraphic switching apparatus 113 85176910 to 85177090 All goods 114 85181000 All goods 115 85182900 Loudspeakers, without housing, having a frequency range of 300 hz to 3.4 khz with a diameter of not exceeding 50 mm, for telecommunication use, of cone type or other than cone type 116 85195000 All goods 117 85232100 All goods 118 85232910 All goods 119 85232930 All goods 120 85232970 Hard disc pack, Floppy disc or diskettes 121 85232990 All goods (unrecorded) 122 85234130 All goods 123 85234140 All goods 124 85234110 Unrecorded compact disc 125 85234920 Video compact disc of educational nature 126 85235210 to 85235290 All goods 127 85238020 All goods 128 85238030 All goods 129 85238060 All goods 130 85238090 Other magnetic tapes for reproducing phenomena 131 85238090 Unrecorded CD Rom 132 85234060 All goods 133 85238090 All goods (unrecorded) 134 85238090 For reproducing phenomena other than sound or image, recorded in a machine readable binary form, and capable of being manipulated or providing inter activity to a user, by means of an automatic data processing machine 135 85255040 to 85255090 All goods 136 85258090 Digital still image video camera 137 85256011 to 85256099 All goods 138 85261000 to 85269190 All goods 139 85279911 All goods 140 85284100 to 85285900 Monitors 141 85291021 All goods 142 85299020 All goods 143 85299090 All goods 144 85309000 145 85312000 All goods 146 85318000 Flat panel display devices of a kind used in automatic data processing machines and telecommunication apparatus 147 85319000 Parts of signaling or traffic control equipment 148 85321000 to 85340000 All goods 149 85365010 to 85365090 All goods 150 85366910 Plugs and sockets of plastic 151 85366990 Plugs and sockets of other materials 152 85369090 All goods 153 8540 40 20 All goods 154 85409100 to 85409900 All goods 155 8541 All goods 156 85423100 to 85423300 Monolithic integrated circuits and hybrid integrated circuits 157 85423100 to 85423300 Cards with single IC with optical strip 158 85429000 Parts of electronic integrated circuits and micro assemblies 159 85431010 All goods 160 85437011 All goods 161 85437013 All goods 162 85439000 Electronic micro-assemblies 163 85444210 All goods 164 85444220 For voltage not exceeding 80V 165 85444230 For voltage not exceeding 80V 166 85444291 For voltage not exceeding 80V 167 85444299 For voltage not exceeding 80V 168 85444299 For voltage not exceeding 80V 169 85444292 For voltage between 80 V and 1000V 170 85444220 For voltage between 80 V and 1000V 171 85444291 Dry core paper insulated for voltage not exceeding 80V 172 85444991 For voltage not exceeding 80V 173 85444991 Dry core paper insulated for voltage not exceeding 80V 174 85444920 For voltage not exceeding 80V 175 85444293 For voltage between 80V and 1000V 176 85446030 Conductors fitted with connectors for voltage between 80 V and 1000V 177 85444999 All goods 178 85447010 to 85447090 All goods 179 85452000 All goods 180 88022000 to 88024000 All goods 181 88031000 to 88033000 All goods 182 90109000 to 90112000 All goods 183 901380 to 901390 All goods 184 9026 All goods 185 90272000 to 90278090 All goods except exposure meter 186 90279020 to 90279090 All goods 187 90304000 All goods 188 90308200 All goods 189 903090 All goods 190 90314100 to 90318000 All goods 191 9704 All goods” [F.No. 354/9/2004-TRU (Pt.II)] (Raj Kumar Digvijay) Under Secretary to the Government of India Note: The principal notification No. 73/2005-Customs, dated the 22nd July, 2005, was published in the Gazette of India, Extraordinary, vide number G.S.R. 498(E), dated the 22nd July, 2005 and was last amended by notification No. 135/2006-Customs, dated the 30th December, 2006 [G.S.R. No. 796 (E), dated the 30th December, 2006].

 
 

18 May, 2012


Notification No. 26 / 2012 - Customs (ADD)

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 26 / 2012 - Customs (ADD) New Delhi, the 14th May, 2012 G.S.R. (E). -Whereas, the designated authority vide initiation notification F.No. 15/40/2010-DGAD, dated the 23rd May, 2011, published in the Gazette of India, Extraordinary, Part 1, section 1, had initiated review in terms of sub-section (5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the said Customs Tariff Act) and in pursuance of rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the said rules), in the matter of continuation of anti-dumping duty on imports of Tyre Curing Presses originating in or exported from China PR, imposed vide notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 01/2010-Customs, dated the 8th January, 2010, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 21(E), dated the 8th January, 2010; And whereas, the designated authority, in its final findings vide notification No. 15/40/2010-DGAD, dated the 29th March, 2012, published in the Gazette of India, Extraordinary, Part I, section 1 had recommended that Six Day Light Curing Press for curing bi-cycle tyres be excluded from the ambit and scope of the anti-dumping duty recommended earlier vide Final Findings dated 15th October, 2009 and notified by Department of Revenue , Ministry of Finance vide Customs Notification No. 01/2010-Customs, dated the 8th January, 2010; Now, therefore, in exercise of the powers conferred by sub-sections (1) and (5) of section 9A of the said Customs Tariff Act and in pursuance of rules 18 and 20 of the said rules, the Central Government hereby makes the following amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 01/2010-Customs, dated the 8th January, 2010, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 21(E), dated the 8th January, 2010, namely: - In the said notification, in the TABLE, in Column 3, against serial numbers 1, 2 and 3, for the words “Tyre Curing Presses”, the words “Tyre Curing Presses except Six Day Light Curing Press for curing bi-cycle tyres” shall be substituted. [F.No.354/80/2009-TRU] (Raj Kumar Digvijay) Under Secretary to the Government of India Note.- The principal notification No. 01/2010-Customs, dated the 8th January, 2010, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 21(E), dated the 8th January, 2010.

 
 

18 May, 2012


Notification No. 25/ 2012-Customs (ADD)

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 25/ 2012-Customs (ADD) New Delhi, the 14th May, 2012 G.S.R. (E). -Whereas, the designated authority vide notification F.No. 15/12/2011-DGAD, dated the 21st March, 2012, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 21st March, 2012, had initiated review in terms of sub-section (5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the said Customs Tariff Act) and in pursuance of rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the said rules), in the matter of continuation of anti-dumping duty on imports of Dry Cell Batteries originating in or exported from China PR, imposed vide notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 57/2007-Customs dated the 13th April, 2007, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 291(E), dated the 13th April, 2007, and had recommended for extension of anti-dumping duty, in terms of sub-section (5) of section 9A of the said Customs Tariff Act; Now, therefore, in exercise of the powers conferred by sub-sections (1) and (5) of section 9A of the said Customs Tariff Act and in pursuance of rules 18 and 20 of the said rules, the Central Government hereby makes the following amendment in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 57/2007-Customs dated the 13th April, 2007, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 291(E), dated the 13th April, 2007, namely: - In the said notification, for paragraph 2, the following shall be substituted, namely: - “2. This notification, unless revoked earlier, shall remain in force up to and inclusive of the 12th April, 2013 and the anti-dumping duty shall be paid in Indian Currency.” [F.No.354/14/2001-TRU (Pt-II] (Raj Kumar Digvijay) Under Secretary to the Government of India Note.- The principal notification No. 57/2007-Customs, dated the 13th April, 2007, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 291(E), dated the 13th April, 2007.

 
 

18 May, 2012


Notification No.24 /2012-Customs (ADD)

[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (i) OF THE GAZETTE OF INDIA, EXTRAORDINARY] GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE *** New Delhi, dated the 14th May, 2012 Notification No.24 /2012-Customs (ADD) G.S.R. (E).- Whereas in the matter of import of PVC Flex Film (hereinafter referred to as the subject goods), falling under Chapter 39 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), originating in, or exported from, the People’s Republic of China (hereinafter referred to as the subject country) and imported into India, the designated authority vide its final findings, in notification No. 14/04/2010-DGAD, dated 29th July, 2011, published in the Gazette of India, Extraordinary, Part I, Section I, dated the 29th July, 2011, had come to the conclusion that- (i) the subject goods had been exported to India from the subject country at prices less than their normal values in the domestic market of the exporting country; (ii) the dumping margins of the subject goods imported from the subject country were substantial and above de minimis; (iii) the domestic industry had suffered material injury and the injury had been caused due to dumped imports of the subject goods originating in or exported from the subject country; (iv) the domestic industry had also been materially retarded due to the dumped imports of subject goods from the subject country; and had recommended imposition of final anti-dumping duty on imports of subject goods, originating in or exported from the subject country; And whereas, on the basis of the aforesaid findings of the designated authority, the Central Government had imposed an anti-dumping duty on the subject goods, vide notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 82/2011-Customs, dated the 25th August, 2011, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-Section (i), vide number G.S.R. 643 (E), dated the 25th August, 2011; And whereas, M/s Haining Tianfu Wrap Knitting Co Ltd, People’s Republic of China ( Producer) and M/s Manna, Korea RP (Exporter) has requested for review in terms of rule 22 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, in respect of exports of the subject goods made by them, and the designated authority, vide new shipper review notification No. 15/23/2011-DGAD dated the 12th April, 2012 published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 12th April 2012, has recommended provisional assessment of all exports of the subject goods made by the above stated party till the completion of the review by it; Now therefore, in exercise of the powers conferred by sub-rule (2) of rule 22 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Central Government, after considering the aforesaid recommendation of the designated authority, hereby orders that pending the outcome of the said review by the designated authority, the subject goods, when exported by M/s Haining Tianfu Wrap Knitting Co Ltd, People’s Republic of China (Producer) and M/s Manna, Korea RP (Exporter) and imported into India, shall be subjected to provisional assessment till the review is completed. 2. The provisional assessment may be subject to such security or guarantee as the proper officer of customs deems fit for payment of the deficiency, if any, in case a definitive anti- dumping duty is imposed retrospectively, on completion of investigation by the designated authority. 3. In case of recommendation of anti-dumping duty after completion of the said review by the designated authority, the importer shall be liable to pay the amount of such anti-dumping duty recommended on review and imposed on all imports of subject goods exported by, M/s Haining Tianfu Wrap Knitting Co Ltd, People’s Republic of China (Producer) and M/s Manna, Korea RP (Exporter) and imported into India, from the date of initiation of the said review. [F. No. 354/ 108/2010-TRU] (Raj Kumar Digvijay) Under Secretary to the Government of India

 
 

18 May, 2012


Notification No. 42/2012 - Customs (N.T.)

[TO BE PUBLISHED THE GAZETTE OF INDIA, EXTRAORDINARY, PART-II, SECTION-3, SUB-SECTION (ii)] Government of India Ministry of Finance (Department of Revenue) (Central Board of Excise and Customs) Notification No. 42/2012 - Customs (N.T.) New Delhi, 15th of May, 2012 25 Vaisakha, 1934 (SAKA) S.O. … (E).– In exercise of the powers conferred by sub-section (2) of section 14 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise & Customs, being satisfied that it is necessary and expedient so to do, hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 36/2001-Customs (N.T.), dated the 3rd August, 2001, published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide number S. O. 748 (E), dated the 3rd August, 2001, namely:- In the said notification, for TABLE-1 and TABLE-2, the following Tables shall be substituted namely:- “TABLE-1 S. No. Chapter/ heading/ sub-heading/tariff item Description of goods Tariff value US $ (Per Metric Tonne) (1) (2) (3) (4) 1 1511 10 00 Crude Palm Oil 447 (i.e. no change) 2 1511 90 10 RBD Palm Oil 476 (i.e. no change) 3 1511 90 90 Others – Palm Oil 462 (i.e. no change) 4 1511 10 00 Crude Palmolein 481 (i.e. no change) 5 1511 90 20 RBD Palmolein 484 (i.e. no change) 6 1511 90 90 Others – Palmolein 483 (i.e. no change) 7 1507 10 00 Crude Soyabean Oil 580 (i.e. no change) 8 7404 00 22 Brass Scrap (all grades) 4362 9 1207 91 00 Poppy seeds 3680 TABLE-2 S. No. Chapter/ heading/ sub-heading/tariff item Description of goods Tariff value (US $) (1) (2) (3) (4) 1 71 or 98 Gold, in any form, in respect of which the benefit of entries at serial number 321 and 323 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed 507 per 10 grams 2 71 or 98 Silver, in any form, in respect of which the benefit of entries at serial number 322 and 324 of the Notification No. 12/2012-Customs dated 17.03.2012 is availed 920 per kilogram” [F. No. 467/01/2012-Cus.V Pt.I] (Abhinav Gupta) Under Secretary to the Government of India Note: - The principal notification was published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide Notification No. 36/2001–Customs (N.T.), dated the 3rd August, 2001, vide number S. O. 748 (E), dated the 3rd August, 2001 and was last amended vide Notification No. 39/2012-Customs (N.T.), dated the 30th April, 2012, published in the Gazette of India, Extraordinary, Part-II, Section-3, Sub-section (ii), vide number S. O. 943 (E) dated, the 30th April, 2012.

 
 

18 May, 2012


Notification No. 43/ 2012-Customs (N.T.)

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (I)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 43/ 2012-Customs (N.T.) New Delhi, dated the 16th May, 2012 G.S.R. (E). - In exercise of the powers conferred by sub-section (2) of section 141 read with section 157 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs hereby makes the following regulations to amend the Handling of Cargo in Customs Areas Regulations, 2009, namely :- 1. (1) These regulations may be called the Handling of Cargo in Customs Areas (Amendment) Regulations, 2012. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In the Handling of Cargo in Customs Areas Regulations, 2009, (hereinafter referred to as the said regulations),- (1) in regulation 6 of the said regulations, in sub-regulation (1),- (i) in clause (a), for the words “proper officer”, the words “Inspector of Customs or Preventive Officer or Examining Officer” shall be substituted; (ii) in clause (f), for the words “proper officer”, the words “Superintendent of Customs or Appraiser” shall be substituted; (iii) in clauses (g), (h) and (k), for the words “proper officer”, the words “Deputy Commissioner or Assistant Commissioner of Customs” shall be substituted; (iv) in clause (l), for the words “proper officer”, the words “Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be” shall be substituted; (2) in regulation 7 of the said regulations, after sub-regulation (1), the following proviso shall be inserted, namely:- “Provided that no exemption shall be granted in respect of any of the conditions referred to in regulation 5, where the overall safety and security of the premises are likely to be affected thereby.”. [F. No. 450/55/2008-Cus.IV] (Vikas) Under Secretary to the Government of India Note: The principal Notification No. 26 / 2009 -Customs (N.T.), dated the 17th March, 2009, was published in the Gazette of India, Extraordinary, Part II, Section 3, sub-section (i), dated the 17th March, 2009 vide G.S.R.174 (E), dated the 17th March, 2009 and was last amended by notification No. 96/2010-Customs (N.T.),dated the 12th November, 2010, vide number G.S.R. 909 (E), dated the 12th November, 2010.

 
 

15 May, 2012


PF balance to be updated every month

Subscribers of the Employees’ Provident Fund Organisation (EPFO) will soon be able to check the balance of their provident fund (PF) accounts on a monthly basis.Once in place, the new system is expected to benefit around 60 million workers covered under EPFO.“The new system will be operational next month,” said RC Mishra, Central Provident Fund Commissioner. At present, subscribers can view their balances only on a yearly basis. “We are moving towards a system similar to that of banks, where the accounts are updated instantly,” added Mishra.Apart from improving the service for the subscribers, the main trigger for the change was the repeated instances where employers had deducted the PF payments from the salaries of their employees, but had not submitted the deductions to EPFO, Mishra said. “Now, it will be very difficult for the employers to hide the deductions from the employees’ accounts. Employees would know when the deductions have been made,” he added.

 
 

11 May, 2012


Circular No. 13/2012-Customs

Circular No. 13/2012-Customs F. No. 528/21039/08-Cus/ICD Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs *** New Delhi, dated the 8th May, 2012 To All Chief Commissioners of Customs/ Customs (P), All Chief Commissioners of Customs & Central Excise, All Director Generals/Chief Departmental Representatives (CESTAT), All Commissioners of Customs / Customs (P), and All Commissioners of Customs & Central Excise. Sir/Madam, Subject: Enforcement of Intellectual Property Rights on imported goods - Clarification on the issue of parallel imports – regarding. *** I am directed to invite your attention to the Notification No.51/2010-Customs (N.T.) dated 30.6.2010 and Board’s Circular No. 41/2007-Customs dated 29.10.2007 prescribing certain conditions and procedures in implementation of Intellectual Property Rights (IPR) such as trade mark, design, patent, geographical indication and copyright under the IPR (Imported Goods) Enforcement Rules, 2007. In this regard, certain representations have been received in the Board from the trade as well as the field formations seeking clarification on the matter of import of original/genuine products (not counterfeit or pirated) which are sold/ acquired legally abroad and imported into the country, by persons other than the intellectual property right holder without permission/authorisation of the IPR holder, which in trade parlance is known as ‘parallel imports’. 2.1. It may be recalled that the notification No.51/2010-Customs (N.T.) dated 30.6.2010 prohibits import of goods for sale or use in India, which are covered under specified legal provisions of the following statutes that regulate products with false trade mark, fraudulent or obvious imitation of design, patent obtained without consent, false Geographical indication or product which infringe registered copyright etc. (i) Trade Marks Act, 1999 (ii) Designs Act, 2000 (iii) Patents Act, 1970 (iv) Geographical Indications of Goods (Registration and Protection) Act, 1999 and (v) Copyright Act, 1957. 2.2. In terms of the legal provisions under the IPR (Imported Goods) Enforcement Rules, 2007 read with notifications and circulars issued in this regard, the determination of the fact that whether particular consignment of imported goods infringes the rights of the IPR holder would be done by the Customs authorities taking into account the provisions of the aforesaid parent Acts. 2.3. It may also be noted that all infringements and consequential offences stated in the aforesaid parent Acts is not limited to import of goods, as the scope of these Acts are wide, interalia, covering enforcement of the legal provisions of these Acts in the country. Hence, it may be noted that the prohibition of imported goods for the purpose of protecting intellectual property rights as specified under Notification No.51/2010-Customs (N.T.), does not relate to all infringements under the parent Acts but only to those imports that infringe the specific provisions of various parent Acts governing IPR, mentioned in the notification No.51/2010-Customs (N.T.). 2.4. To illustrate, in case of the Trade Marks Act, 1999, prohibitions against infringement of trade marks on import of goods intended for sale or use in India, that attract the provisions IPR (Imported Goods) Enforcement Rules, 2007, have been given in para (i) and (ii) of aforesaid notification, viz,: (i) imported goods having applied thereto a false trade mark, as specified in section 102 of the Trade Marks Act, 1999 [for para (i)] (ii) imported goods having applied thereto any ‘false trade description’ within the meaning of definition provided in clause (i), in relation to any of the matters connected to description, statement or other indication direct or indirect of the product but not including those specified sub- clauses (ii) and (iii) of clause (za), of sub-section (1) of section 2 of the Trade Marks Act, 1999[for para (ii)]. Thus, the prohibition under the para (i) and (ii) of aforesaid Notification No.51/2010-Customs (NT) would be applicable only when the imported goods fall within the purview of the above referred provisions of Trade Marks Act, 1999. 3. In this context, the issue of permitting import of original/genuine products (not counterfeit or pirated) which are sold/ acquired legally abroad and imported into the country, by persons other than the intellectual property right holder without permission/ authorisation of the IPR holder, known in the trade as ‘parallel imports’ was referred to the administrative Ministry i.e., Department of Industrial Policy and Promotion (DIP&P), Ministry of Commerce & Industries, seeking their clarification. 4. In this regard, the Department of Industrial Policy and Promotion which is nodal authority for all matters relating to (i) Trade Marks Act, 1999 (ii) Patents Act, 1970 and (iii) Designs Act, 2000 has, interalia, stated that: (i) Section 107A (b) of the Patents Act, 1970 provides that importation of patented products by any person from a person who is duly authorised under the law to produce and sell or distribute the product shall not be considered as an infringement of patent rights. Hence, in so far as Patents are concerned, Section 107A (b) provides for parallel imports. (ii) Section 30(3)(b) of the Trade Marks Act, 1999 provides that where the goods bearing a registered Trade Mark are lawfully acquired, further sale or other dealing in such goods by purchaser or by a person claiming to represent him is not considered an infringement by reason only of the goods having been put on the market under the registered Trade Mark by the proprietor or with his consent. However, such goods should not have been materially altered or impaired after they were put in the market. (iii) In so far as designs are concerned, it is clarified that parallel imports are not allowed as indicated by Section 22 (1)(b) of the Designs Act, 2000. (iv) As regards geographical indications, it is stated that there are no identical or similar provisions as in Section 107A(b) of Patents Act, 1970 on parallel imports under the Geographical Indications of Goods (Registration and Protection) Act, 1999. The said Act does not address the issue of parallel import at all. Hence, parallel imports are not covered under this Act. (v) As regards ‘copyright’ since the clarification is awaited from the nodal authority i.e., Department of Higher Education, the field formations may follow the extant provisions of the Copyright Act, 1957 until further instructions are issued in this regard. 5.1. In view of the above, the field formations are directed to decide cases of import of ‘parallel imports’ on the basis of aforesaid legal provisions of parent Acts, the provisions of Notification No. 51/2010-Customs(N.T.) dated 30.6.2010 and the clarification given by the administrative Ministry as detailed in para 4 above. 6. The above instructions may be brought to the notice of all concerned immediately and wide publicity of this circular may given through appropriate Public Notice. 7. Receipt of this Circular may kindly be acknowledged. (M. Satish Kumar Reddy) Director (ICD)

 
 

11 May, 2012


Notification No. 32/ 2012 - Customs

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 32/ 2012 - Customs New Delhi, dated the 8th May, 2012 G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.21/2012-Customs dated the 17th March, 2012 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 194 (E), dated the 17th March, 2012, namely:- In the said notification,- I. in the proviso, for condition numbers (i) and (ii), the following shall be substituted, namely:- (i) the State of destination namely the State where the goods are intended to be taken immediately after importation whether for sale or for distribution on stock transfer basis; and (ii) his VAT (Value Added Tax) registration number or Sales Tax registration number or Central Sales Tax registration number, as the case may be, in the said State.; II. in the Table, against S. No. 14, in the entry in column (3), for the words “solar thermal power”, the words “solar power” shall be substituted. [F.No. 334/1/2012-TRU] (Sanjeev Kumar Singh) Under Secretary to Government of India Note.- The principal notification No. 21/2012-Customs dated the 17th March, 2012, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 194 (E), dated the 17th March, 2012 and was last amended by notification No. 29/2012-Customs dated the 30th April, 2012 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 328 (E), dated the 30th April, 2012.

 
 

11 May, 2012


Notification No. 31/2012-Customs

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 31/2012-Customs New Delhi, the 8th May, 2012 G.S.R. (E). - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2012-Customs, dated the 17th March, 2012 which was published in the Gazette of India, Extraordinary, vide G.S.R. 185(E) dated the 17th March, 2012, namely: - In the said notification, in the Table, i. against S. No. 187, for the entry in column (2), the entry “2905 43 00, 2905 44 00, 3301, 3501, 3502, 3503, 3504, 3505, 3809 10 00, 3823 11 11, 3823 11 12, 3823 11 19” shall be substituted; ii. for S. No. 234 and the entries relating thereto, the following shall be substituted, namely:- “234. 39, 72 and 81 The following goods, for the manufacture of orthopaedic implants falling under sub-heading 9021 10, namely:- (i) Special grade stainless steel; Nil Nil 5 (ii) Titanium alloys; Nil Nil 5 (iii) Cobalt-chrome alloys; Nil Nil 5 (iv) High-density polyethylene. Nil - 5” iii. for S. No. 260 and the entries relating thereto, the following shall be substituted, namely:- “260. 47 Pulp of wood or of other fibrous cellulosic material (excluding rayon grade wood pulp) when used for the manufacture of the following, namely:- (i) newsprint; Nil - 5 and 25 (ii) paper and paperboard; Nil - 5 (iii) adult diapers. Nil - 5” (iv) against S. No. 300, for the entry in column (4), against item(1) and (2), the entry “10%” shall be substituted; (v) after S. No. 318 and the entries relating thereto, the following shall be inserted, namely:- “ 319 28, 29, 38, 39, 70, 74, 76 Goods specified at S. Nos. 7 and 18 of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.25/1999-Customs, dated the 28th February, 1999 [G.S.R 161(E), dated the 28th February, 1999] - Nil 5 ” (vi) against S. No. 432, in column (3), for the figure and word “20 inches”, the figure and word “19 inches” shall be substituted; (vii) in the proviso, clause (c ) and the entries relating thereto shall be omitted. [F. No. 334/1/2012-TRU] [Sanjeev Kumar Singh] Under Secretary to the Government of India Note.- The principal notification No.12/2012-Customs, dated the 17th March, 2012 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 185(E) dated the 17th March, 2012, which has been last amended vide notification No. 26/2012-Customs, dated the 18th April, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 305(E) dated the 18th April, 2012.

 
 

11 May, 2012


Notification No. 30/2012-Customs

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No. 30/2012-Customs New Delhi, dated the 8thMay, 2012 G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 39/96-Customs, dated the 23rd July, 1996, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 291(E), dated the 23rd July, 1996, namely:- In the said notification, after the Table, the following shall be inserted, namely:- “2. Notwithstanding anything contained herein above, the exemption from whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act shall not apply to the following goods, namely:- (i) Hand held Metal detector (ii) Postal Bomb detector (iii) Explosive Container (iv) Portable or Fixed Door frame Metal detector, (v) Deep search Metal or Mine detector (vi) Mine impactor (vii) Mine prodder ( non-magnetic) and (viii) Under Vehicle search Mirrors.” [F.No.334/1/2012 –TRU] (Sanjeev Kumar Singh) Under Secretary to the Government of India Note. - The principal notification No.39/1996-Customs, dated the 23rd July, 1996 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide G.S.R. 291(E), dated the 23rd July, 1996 and was last amended vide notification No.11/2012-Customs, dated the 17th March, 2012 which was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 184 (E), dated 17th March, 2012.

 
 

10 May, 2012


CORPORATE & OTHER LAWS

Fertiliser firms to benefit from urea policy change After potash and phosphatic fertilisers, whose prices were partially decontrolled in 2010, the government will now go for a series of policy changes in pricing urea, the most commonly used fertiliser.These policy revisions will benefit the industry with the government approval for a hike in their urea production costs. The government will foot the bill for the extra subsidy arising from the higher cost.The cabinet committee on economic affairs (CCEA) is likely to consider these changes in a couple of weeks. Subsequently, however, the retail prices of urea could be hiked by 10% in a separate move.Modifications to the pricing system to recognise higher fixed costs would provide relief to the 29 producers in the country by roughly R350 a tonne.

 
 

10 May, 2012


Ministry seeks Cabinet nod for National IT Policy

The Ministry of Communications and Information Technology (MCIT) has sought Cabinet approval for the proposed National Policy on IT.A draft note has been sent to secretaries of all the Cabinet Ministers and departments concerned for their comments.According to the draft Cabinet note, seen by Business Line, some of the objectives of the proposed policy include providing fiscal benefit to small and medium enterprises and start-ups for adoption of IT in value creation.It envisages increasing revenue of IT and IT-enabled services (ITeS) industry from $88 billion right now to $300 billion by 2020. Also, to expand IT and ITeS exports from $59 billion at present to $200 billion by 2020.“The objective is to gain significant global market share in emerging technologies and services,” the note said.However, industry bodies such as Nasscom said a framework needs to be worked out for implementation of the proposed policy.“The intent of various statements are good…but the idea is to make it happen,” Ms Sangeeta Gupta, Senior Vice-President, Nasscom, told Business Line.

 
 

10 May, 2012


Sinha Panel recommends joint patrol of fund inflows into stock exchanges

The parliament\'s standing committee on finance has called for a joint coordination mechanism to monitor fund flows into the stock exchanges, saying individual banks cannot by themselves check the flow of tainted money.The panel, headed by former finance minister and BJP leader Yashwant Sinha, also demanded a crackdown on multi-tiered structures floated in tax havens for round-tripping of black money.\"In the committee\'s view, scrutiny of fund flows into the markets cannot be left to individual banks, as tainted money flowing into markets remains a distinct possibility,\" the committee said in its report on the Prevention of Money Laundering (Amendment) Bill, 2011 that seeks to strengthen the framework for curbing illicit flows.It has urged market watchdog Sebi to set up a coordination mechanism involving the Reserve Bank, tax sleuths and intelligent bureaus to monitor flow of funds into stock markets.It suggested that the coordination mechanism should include enforcement directorate, Directorate of Revenue Intelligence, and investigation wing of the income-tax department and the financial intelligence unit.

 
 

10 May, 2012


Govt extends tax exemption for pvt PF trusts till Mar ’13

Giving relief to about 46 lakh subscribers of over 2,700 private PF Trusts, the finance ministry has extended the income tax exemption for them till March 31, 2013. The subscribers of these private provident fund trusts were facing the threat of their retirement funds coming under tax net as Budget 2012-13 was silent on this issue.“The government has extended the income tax exemption for all unrecognised private PF trusts till March 31 next year. The amendment was incorporated in the Finance Bill which was approved by Lok Sabha on Tuesday,\" said a finance ministry official.In 2006, the then finance minister P Chidambaram had made it mandatory for all private PF trusts to seek exemption certificates from the labour ministry within a year for enjoying the tax benefits.

 
 

08 May, 2012


Finance Bill: TDS on property deals withdrawn

Finance Minister Pranab Mukherjee on Monday rolled back the proposed 1% tax deduction at source (TDS) on transfer of immovable property.The Finance Bill had proposed that \"every transferee of immovable property (other than agricultural land), at the time of making payment for transfer of the property, shall deduct tax at the rate of 1% of such sum\".The proposal would have increased the compliance burden on the part of the buyer, who would have had to deduct the amount and then submit it with the tax authorities.\"This would have created a bottleneck for the buyer and increased the complexity of a property transaction,\" said Samarjit Singh, managing director of Delhi-based property broking firm IndiaHomes.The buyer was required to provide personal details, details about the property and the seller in the tax deduction form.Experts say that the 1% TDS at the time of the transaction was also a way for the government to collect more information on the value of property transactions in the country.

 
 

08 May, 2012


Pranab brings new twist to taxation of indirect transfers

If you thought that Finance Minister, Mr Pranab Mukherjee\'s statement on Monday regarding retrospective ‘clarificatory\' amendments would bring cheer for telecom major Vodafone, think again.Nothing changes for Vodafone on account of Mr Mukherjee\'s remarks in Lok Sabha on the retrospective amendments, official sources said.Simply put, top Finance Ministry officials do not think that the Minister has through today\'s statements opened any window of opportunity for Vodafone in the controversial tax issue related to its $11.2-billion deal with Hutchison Whampao in 2007.The retrospective clarificatory amendments now under the consideration of Parliament will not be used to reopen any cases where assessment orders have already been finalised, Mr Mukherjee said while moving the Finance Bill 2012 for consideration of the Lower House today.He also said that the Central Board of Direct Taxes (CBDT) has been asked to issue a policy circular to clearly state this position after the passage of the Finance Bill.There are mixed views among tax experts on whether these remarks would lead to Vodafone coming under the taxman\'s lens post the retrospective amendments. Mr Mukherjee reiterated the Government stance that the clarificatory amendments do not override the provisions of the double tax avoidance agreement which India has with 82 countries. It would impact those cases where the transaction has been routed through low tax or no tax countries with whom India does not have a DTAA, he said.

 
 

08 May, 2012


Finance Bill: Pranab Mukherjee puts shine back on gold jewellery, rolls back excise duty

Finance Minister Pranab Mukherjee has scrapped the 1% excise on gold jewellery proposed in the Budget, raising expectations among traders of a pickup in demand ahead of the wedding season. Mukherjee announced in Parliament on Monday the rollback of excise duty on both branded and unbranded jewellery, bowing to demand within and outside the House. Jewellers and bullion dealers welcomed the decision that would make gold cheaper by about 300 per 10 gram. \"The relief has come at the right time as the next two months are very crucial for gold jewellers. June and July are the two major months for wedding season and we expect demand to soar due to this relief,\" said Mehul Choksi, chairman and managing director of Gitanjali Group. The proposal had created a furore among jewellers, who went on a 21-day strike that resulted in a loss of about 22,000 crore in sales.

 
 

07 May, 2012


Dumping duty levied on partially oriented yarn from China

The Finance Ministry has levied definitive anti-dumping duty on partially oriented yarn (POY) imports from China. This duty will last for five years unless revoked earlier.An anti-dumping duty of $542.22 per tonne has been imposed on all POY imports originating in or exported from China.This follows the Designated Authority\'s recommendation in its Sunset Review final findings in February for continuation of definitive anti-dumping duty for five more years.POY is yarn of polyester and is an intermediate which is subject to further processing, for example texturising or draw twisting to make it suitable for weaving or knitting into fabrics. The Association of Synthetic Fibre Industry had filed the application on behalf of the domestic industry comprising Reliance Industries, Garden Silk Mills and JBF Ltd.The application was supported by Indo Rama Synthetics and Alok Industries.The Finance Ministry had originally imposed definitive anti-dumping duty on POY imports from China in August 2007.

 
 

07 May, 2012


Tackling double taxation of software

The indirect taxation of information technology software has been a longstanding matter of debate and dispute. In particular, the challenge of double taxation has been endemic. This article highlights the recent developments in this regard which could equally pose challenges as also present opportunities to mitigate the impact of the tax.In order to better understand these developments, it is worthwhile to briefly recapitulate the manner in which such information technology software is presently taxed. On the fundamental issue of the proper classification of such software as either ‘goods’ or ‘services’, the Hon’ble Supreme Court, in its landmark decision in Tata Consultancy Services vs state of Andhra Pradesh [(2004) 178 ELT 22 (SC)], had observed that ‘goods’ could be a tangible property or an intangible one. For anything to become ‘goods’, it had to posses the following attributes (a) it should have utility; (b) it should be capable of being bought and sold; and (c) it should be capable of being transmitted, transferred, delivered, stored and possessed. Therefore, if the software, whether or not customised, was capable of abstraction, consumption, use, transmission, transfer or delivery, it would be treated as goods. Once the software is classified as goods, it is liable to the goods taxes of customs duty, excise duty and the VAT.

 
 

07 May, 2012


Black money: Information exchange pacts turn troublesome for NRIs

India\'s search for black money overseas is having an unintended consequence, one that could affect one of its stable sources of dollars. Investments by non-resident Indians, or NRIs, and their funds parked in India are coming under the glare of the tax authorities in their home countries.Indian income-tax authorities are sending financial details of NRIs to their respective countries under the information exchange agreements inked by New Delhi with many countries.\"Not only are we getting data on our taxpayers from other countries, but we are also sharing details on non-residents,\" said an income tax official, adding that many countries were actively seeking information but did not give the names.This automatic exchange of information is a result of the efforts made by Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee at the G-20.Indians settled overseas have collectively pumped in nearly $9.7 billion in NRI deposits in India in April-February 2011-12 financial year to take advantage of the higher returns available here.

 
 

05 May, 2012


Bring back entry load of MFs, Fin advisors tell SEBI

A revival of entry load and allowing fund houses to revive the practice of providing \'indicative yields\' while floating fixed maturity plans were among the key demands put forth by independent financial advisor (IFA) associations in their meeting with top SEBI officials on Thursday. The meeting was chaired by SEBI whole-time member Prashant Saran and IFAs were represented by members of Chennai-based IFA Galaxy and Mumbai-based Foundation of Independent Financial Advisors (FIFA). In the meeting, both the regulator and the IFAs expressed concerns over the current state of the domestic asset management industry, whose growth has stagnated in the last three years partly because of bearish markets and distributor apathy towards mutual fund products after the ban on entry load - the initial fee that MFs charged investors to pay distributors. FIFA members requested SEBI to roll-back entry load, which was banned in August 2009. The members impressed upon the SEBI panel the need for higher pay-out (distributor commission) to widen the reach of mutual funds beyond \'top-20\' cities. The SEBI panel has made a note of this request by IFAs; many expect a \"favourable decision\" regarding entry loads in a couple of weeks\' time, said people who attended the meeting. Both SEBI and the IFA panel chose not to discuss the contentious \'agent-advisor distribution model\', on which SEBI issued a concept paper a few months ago.

 
 

05 May, 2012


Govt may withdraw excise duty on gold jewellery

Jewellers may heave a sigh of relief as the government may withdraw the new excise duty proposals on the sector.In a decision to be taken next week, the finance ministry may remove the duty on both, branded and unbranded jewellery, while continuing with the basic Customs duty structure on gold bars.The ministry had levied an excise duty of one per cent on branded precious metal jewellery in the Budget this year. In the Union Budget 2012-13, the finance ministry included unbranded jewellery under the excise duty structure. However, jewellers may be subjected to scrutiny for extension of small-scale industry exemption, registration, etc, sources said. According to sources close to the development, the proposal for tax collection at source (TCS) on purchase in cash of bullion or jewellery in excess of Rs 2 lakh may also get reviewed. Sources said in order to balance the concern of unaccounted funds getting routed through jewellery purchase and harassment to genuine consumers of gold, the threshold for collection of TCS at the rate of one per cent of the sale may be raised.

 
 

05 May, 2012


Govt may ask Vodafone to seek Settlement Commission reprieve

Fearing any special dispensation to Vodafone by way of a penalty waiver could create an uproar in Parliament and enrage companies that have already paid tax in similar deals, the finance ministry may ask the British telecom major to settle the issue by approaching the Income Tax Settlement Commission.The legal recourse may help the company secure a waiver on penalty of Rs 7,900 crore and also a part or full waiver on interest of about Rs 4,500 crore. In about 90 per cent of the cases, the commission waives the penalty, and, in some cases, the interest as well. Thus, Vodafone’s net tax liability may be between Rs 7,900 crore (the tax demand) and Rs 12,400 crore.

 
 

05 May, 2012


GAAR may be put off by a year

The finance ministry may defer the implementation of the controversial General Anti Avoidance Rule (GAAR) by a year, as investors have demanded more time for compliance.“There is a strong demand from investors to defer GAAR. We are trying to address their concerns,” said a finance ministry official, who did not wish to be identified.The official denied the introduction of any grandfathering provisions under GAAR, but did not rule out the possibility of deferment. The government will also specify a threshold in GAAR to determine the tax amount above which the rule could be invoked.The ministry is planning a high threshold so that small investors, salaried taxpayers and individuals are exempted. The threshold may be around Rs 10-15 crore, lower than industry expectations.If GAAR is implemented from April 2013, it will give time to both the investors and the tax authorities to adjust to the system. The recommendations on the implementation date will be made by a panel framing the rules headed by the Director General of International Taxation. The final call will be taken by Finance Minister Pranab Mukherjee and stated in his reply to the Finance Bill, expected to be taken up in the Lok Sabha on May 7.

 
 

05 May, 2012


Income Tax Act changes not to hurt FDI: SS Palanimanickam

The government has said its proposal to amend the Income Tax Act with retrospective effect to tax Vodafone-type merger and acquisition deals will not hurt foreign investment. \"These (Income Tax Act) amendments will not have any impact on foreign investment flow in the country,\" the minister of state for finance SS Palanimanickam told the Lok Sabha in a written reply.Moreover, the minister added, as proposed changes in the Income Tax Act, 1961 are only clarificatory in nature they, \"will not override the provisions of Double Taxation Avoidance Agreements with 82 countries, which are relevant for taxation of non-residents in the case of offshore mergers and acquisitions\".

 
 

05 May, 2012


Advisory Group on taxation, transfer pricing set up

The Central Government, on Thursday, announced the setting up of a 13-member advisory group on international taxation and transfer pricing headed by the Revenue Secretary.The advisory group, constituted by the Central Board of Direct Taxes (CBDT), will have representatives from the apex chambers of commerce and industry, the software industry association Nasscom, and the chartered accountants\' institute ICAI.According to a Finance Ministry statement here, apart from the Revenue Secretary, other members of the panel from the government side are CBDT Chairman Laxman Das, Director-General of Income-tax (DGIT) (International Taxation), and three joint secretaries in the Department of Revenue dealing with transfer pricing of which Joint Secretary (FT&TR-I) will be the Member-Secretary.Representing the industry as members of the advisory panel are: Som Mittal of Nasscom, P. Y. Gurav of CII, Dinesh Kanabar of FICCI, Ved Jain of Assocham, Mahesh P. Sarda of ICAI, T. P. Ostwal of IFA India, and Mukesh Butani of ICC India.It may be recalled that a committee under the chairmanship of DGIT (International Taxation) was set up to look into the issue of revising the transfer pricing provisions and its interim report, submitted some time ago, is under the government\'s consideration.The issue has assumed significance in recent years as the transfer pricing mechanism is often misused by multinational entities to transfer profits to their subsidiary units in low or no tax countries. According to a Global Financial Integrity report, illegal transfer of funds through mispricing accounts for 77.6 per cent of the total illicit outflows.

 
 

05 May, 2012


Circular No.12 / 2012 - Customs

Circular No.12 / 2012 - Customs F. No. 528/27/2010-CUS (TU) Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs Tariff Unit *** New Delhi, the 1st May, 2012. To All Chief Commissioners of Customs/ Customs (Prev.)/ C&CE, All Directors General of CBEC, All Commissioners of Customs / Customs (Prev.) / C&CE All Commissioners of Customs & Central Excise (Appeals). Subject: Classification of Micro / Mini SD Cards - regarding. Doubts have been raised as regards the classification of Micro / Mini SD Cards in the Sub-heading 852351, which covers Semiconductor media, Solid – state non-volatile storage devices or the Sub-heading 852352, which applies to Semiconductor media, Smart cards. The matter was also deliberated upon in the Bangalore 2011 Conference of Chief Commissioners of Customs. 2. The correct classification of Micro / Mini SD Cards was examined in the Board and also deliberated in the 49th meeting of WCO’s Harmonized Systems Committee (HSC). The technical inputs received revealed that the product structure of Micro /Mini SD Cards can be divided into two broad categories: Category 1: where there is PCB in the same housing, and Category 2: where there is no PCB instead there is substrates like alumina substrate with IC mounted in the substrate and interconnects printed on substrate. 3. Reportedly, at the time when Note 4(a) to Chapter 85 was adopted the solid-state non-volatile storage cards included a traditional printed circuit board. SD card technology has since evolved and now uses “Chip on Board” substrate packaging (also known as System-in-Package or SIP) instead of traditional printed circuit board assembly packaging to provide the exact same SD functionality. The Current SD cards contain a substrate or support on which the components (flash memory, controller, passive elements) are mounted. Moreover, Note 5 to Chapter 85 defines printed circuits for the purposes of heading 8534 and the Explanatory Note thereto provides further insight that confirms that circuits are made by forming on an insulating base, by any printing process (conventional printing or embossing, plating-up, etching, etc.), conductor elements (wiring), contacts or other printed components such as inductances, resistors and capacitors (“passive” Elements), other than elements which can produce, rectify, detect, modulate or amplify electric signals, such as diodes, triodes or other “active” elements. In this regard the WCO’s HSC is of the opinion that a very broad definition of printed circuits was intended. 4. Micro / Mini SD Cards are manufactured using an etching process. The etching process is one of the processes specifically identified in the definition of “printed circuit” in Note 5 to Chapter 85. Thus, the substrates used fully comply with the definitions of printed circuits found in the Harmonized System and therefore, the substrate of Micro / Mini SD Cards qualifies as a printed circuit board for purposes of Note 4(a) to Chapter 85. 5. The issue of classification of Micro / Mini SD cards was also referred to the Department of Information Technology (DIT), Ministry of Communications & Information Technology. Technical inputs from this Ministry revealed that connecting pins can be treated as connecting sockets and the product covered in the aforesaid two broad categories remain solid-state non-volatile storage devices even when substrate is of alumina. This Ministry has also suggested classification of Micro / Mini SD Cards in Sub-heading 8523.51 6. In view of the aforesaid, Board is of the considered view that in case of Micro / Mini SD Cards wherein the PCB is substituted by substrates, then such substrates fully comply with the definitions of printed circuits found in the Harmonized System and the qualifies as a printed circuit board and connecting pins qualifies as connecting sockets for purposes of Note 4(a) to Chapter 85. As such, Micro / Mini SD Cards are correctly classified in Sub-heading 8523.51 as Semiconductor media, solid-state, non-volatile data storage devices by application of General Rules for Interpretation of Import Tariff (GRIs) 1 (Note 4(a) to Chapter 85) and 6. 7. The Board desires that the pending provisional assessment cases of Micro/ Mini SD Card imports may be finalised on the basis of above instructions. Difficulties, if any, in implementation, may be brought to the notice of the Board. Yours faithfully, (Subodh Singh), OSD (Customs), Tariff Unit, Fax-011-23092173

 
 

05 May, 2012


Notification No.22/2012-Customs (ADD)

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) Notification No.22/2012-Customs (ADD) New Delhi, dated the 2nd May, 2012 G.S.R. (E). -Whereas, the designated authority vide notification No. 15/27/2010-DGAD, dated the 11th February,2011, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 11th February,2011, had initiated review in terms of sub-section (5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975) (hereinafter referred to as the said Customs Tariff Act) and in pursuance of rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the said rules), in the matter of continuation of anti-dumping duty on imports of Partially Oriented Yarn (POY) (hereinafter referred to as the subject goods), falling under Heading 5402 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), originating in, or exported from, the People’s Republic of China (hereinafter referred to as the subject country), imposed vide notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 92/2007-Customs, dated the 3rd August,2007, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R.535(E), dated the 3rd August,2007,as extended vide notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 71/2011-Customs, dated the 9th August, 2011, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R.609 (E), dated the 9th August, 2011, and had recommended, vide notification No. 15/27/2010-DGAD, dated the 10th February, 2012, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 10th February, 2012, continuation of anti-dumping duty at the rates notified vide notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 92/2007-Customs, dated the 3rd August,2007, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R.535(E), dated the 3rd August,2007,on imports of the subject goods originating in, or exported from, the subject country. Now, therefore, in exercise of the powers conferred by sub-section (1) read with sub-section (5) of the section 9A of the said Customs Tariff Act, 1975 and rules 18 and 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Central Government, on the basis of the aforesaid final findings of the designated authority, hereby imposes on the subject goods, the description of which is specified in column (3) of the Table below, falling under heading of the First Schedule to the Customs Tariff Act, 1975, as specified in the corresponding entry in column (2), the specification of which is specified in column (4) of the said Table, originating in the countries specified in the corresponding entry in column (5), and exported from the countries specified in the corresponding entry in column (6) and produced by the producers specified in the corresponding entry in column (7) and exported by the exporters specified in the corresponding entry in column (8), and imported into India, an anti-dumping duty which shall be equal to the amount specified in the corresponding entry in column (9), in the currency as specified in the corresponding entry in column (11) and per unit of measurement as specified in the corresponding entry in column (10) of the said Table. Table S. No. Heading Description of goods Specification Country of origin Country of Export Producer Exporter Amount Unit of Measurement Currency (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) 1 5402 Partially Oriented Yarn Any People’s Republic of China Any Any Any 545.22 Metric tonne US dollar 2 5402 Partially Oriented Yarn Any Any People’s Republic of China Any Any 545.22 Metric tonne US dollar 2. The anti-dumping duty imposed shall be levied for a period of five years (unless revoked, superseded or amended earlier) from the date of publication of this notification in the Official Gazette and shall be payable in Indian currency. Explanation. - For the purposes of this notification, “rate of exchange” applicable for the purposes of calculation of anti-dumping duty shall be the rate which is specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue), issued from time to time, in exercise of the powers under sub-clause (i) of clause (a) of sub-section (3) of section 14 of the Customs Act, 1962 (52 of 1962) and the relevant date for determination of the rate of exchange shall be the date of presentation of the bill of entry under section 46 of the said Customs Act. [F. No.354/100/2006-TRU (Pt.I)] (Sanjeev Kumar Singh) Under Secretary to the Government of India.

 
 

05 May, 2012


Notification No. 40/2012-Customs

[To be published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii)] Government of India Ministry of Finance (Department of Revenue) Notification No. 40/2012-Customs (N.T.) New Delhi, dated the 2nd May, 2012. S.O. (E). – In exercise of the powers conferred by sub-section (34) of section 2 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs, hereby assigns the officers and above the rank of officers mentioned in Column (2) of the Table below, the functions as the proper officers in relation to the various sections of the Customs Act, 1962, given in the corresponding entry in Column (3) of the said Table:- Table Sl. No. Designation of the officers Functions under Section of the Customs Act, 1962 (1) (2) (3) 1. Commissioner of Customs. (i) Section 33. 2. Additional Commissioner or Joint Commissioner of Customs. (i) Sub-section (5) of section 46; and (ii) Section 149. 3. Deputy Commissioner or Assistant Commissioner of Customs and Central Excise. (i) Sub-section (5) of section 17; (ii) Section 18; (iii) Section 21; (iv) Section 22; (v) Section 26A; (vi) Section 28; (vii) Section 28B; (viii) Section 28BA; (ix) Section 30; (x) Sub-section (2) of section 31; (xi) Section 32; (xii) Proviso to section 34; (xiii) Section 35; (xiv) Section 42; (xv) Sub-section (3) of section 45; (xvi) Second Proviso to sub-section (1) of section and sub-section (2) of section 46; (xvii) Section 48; (xviii) Sub-section (3) of section 54; (xix) Section 59; (xx) Section 60; (xxi) Section 61; (xxii) Section 63; (xxiii) Clause (f) of section 64; (xxiv) Section 67; (xxv) Section 72; (xxvi) Section 73; (xxvii) Section 80; (xxviii) Section 85; (xxix) Section 89; (xxx) Section 97; (xxxi) Sub-section (1A) of section 110; (xxxii) Section 129A; (xxxiii) Section 129DD; (xxxiv) Section 129E; (xxxv) Section 130D; and (xxxvi) Section 142. 4. Deputy Director or Assistant Director in the Directorate General of Revenue Intelligence and Directorate General of Central Excise Intelligence. (i) Section 28B; and (ii) Section 72. 5. Superintendent of Customs and Central Excise or Appraiser (i) Section 13; (ii) Section 14; (iii) Sub-sections (2), (3), (4) and (6) of section 17; (iv) Section 19; (v) Section 40; (vi) Section 41; (vii) Clause (b) of sub-section (2) of section 45; (viii) Sub-sections (1) and (4) of section 46; (ix) Section 47; (x) Section 50; (xi) Section 51; (xii) Section 54; (xiii) Section 62; (xiv) Clause (a) to (e) of section 64; (xv) Section 68; (xvi) Section 69; (xvii) Section 79; (xviii) Section 83; (xix) Section 86; (xx) Section 92; and (xxi) Section 93. 6. Intelligence Officer in the Directorate General of Revenue Intelligence and Directorate General of Central Excise Intelligence. (i) Section 37; (ii) Section 100; (iii) Section 103; (iv) Section 106; (v) Section 106A; (vi) Sub-sections (1) and (3) of section 110; (viii) Section 144; and (ix) Section 145. 7. Inspector of Customs and Central Excise or Preventive Officer or Examining Officer. (i) Sub-section (1) of section 31; (ii) Section 34 excluding proviso to the section; (iii) Section 37; (iv) Section 38; (v) Section 39; (vi) Clause (a) of sub-section (2) of section 45; (vii) Section 77; (viii) Section 94; (ix) Section 95; (x) Section 100; (xi) Section 103; (xii) Section 106; (xiii) Section 106A; (xiv) Sub-sections (1) and (3) of section 110; (xv) Section 144; and (xvi) Section 145. [F.No. 437/1/2011-Dir (Cus)] (Vikas) Under Secretary to the Government of India

 
 

03 May, 2012


COMPANY LAW

1. Where financial institution had sold plant and machinery of company-in-liquidation prior to its winding up, directors could not be held liable for same - [2012] 20 taxmann 591 (Karnataka) 2. Proceeding initiated against company for making false statement in prospectus would not be quashed when directors of company had no intention to do business as set out in prospectus and their intention was just to mop up funds from public - [2012] 20 taxmann 544 (Delhi)

 
 

03 May, 2012


RELEVANT TAX CASES INCOME TAX

1. Where fair market value of subject property determined by appropriate authority was higher than apparent sale consideration by 30.48% and petitioner had not made any effort before appropriate authority to rebut allegation of understatement of apparent sale consideration, order passed by appropriate authority under section 269UD(1) was to be upheld - [2012] 20 taxmann 461 (Delhi) 2. Assessing firm having not disclosed names of persons to whom jewellery had been sold and also no evidence having been furnished by assessee to establish that cash deposited in its bank account was in lieu of sales made of Jewellery, addition made to assessee\'s income on account of unverifiable sales was justified - [2012] 20 taxmann 462 (Punjab and Haryana) 3. Income derived from an activity having direct and immediate nexus to activity of export, is not deductible from profits of business by applying provisions of Explanation (baa) to section 80HHC - [2012] 20 taxmann 463 (Karnataka) 4. In the instant case, assets which had been transferred during the year under consideration were part of another block of assets termed as plant and machinery (not in use). No depreciation had ever been claimed on the aforesaid assets and were capitalized separately by the assessee. In such circumstances where the assessee had shown two block of assets separately i.e. the one on which depreciation was claimed @ 25% and the other on which no depreciation whatsoever was claimed in any of the previous years, the two assets were different from each other and plant and machinery acquired in succeeding years did not merge with the earlier block of assets of plant and machinery. • The assessee having not claimed any depreciation on the same could not be burdened with the provisions of section 50 as the basic requirement for the applicability of section 50 is the assets forming part of block of assets in respect of depreciation had been allowed under the Act. In the absence of any depreciation being allowed to the assessee in the any of the previous years on the said plant and machinery (not in use), deeming provisions of section 50 cannot be invoked. Related case: 1. CIT v. Sakthi Metal Depot [2010] 189 Taxman 329 (Ker.) where Kerala High Court took a view that when assessee had been allowed depreciation on flat in question as a business asset up to assessment year 1995-96, flat continued to be part of business asset and depreciable asset, no matter its non-user disentitled assessee to depreciation for two years prior to date of sale and therefore profit arising on sale of said flat would be assessed as a short-term capital gain under section 50. 2. Divine Construction Co. v. ACIT [2011] 16 taxmann 236 (Mum.) - [2012] 20 taxmann 501 (Punj. & Har.) 5. Income from a market complex constructed for commercial exploitation taxable as business income and not as income from house property • The facts that the bank took cognizance of the commercial viability of this project to grant loan, partners pooled their resources to repay the loan and assessee let out the property to the commercial organizations for earning income would advance assessee\'s case that income was taxable as business income and not as income from house property - [2012] 20 taxmann 698 (Cuttack - Trib.) 1. Where assessee incurred expenditure on education of its director at abroad, in absence of any bond executed by director that she would work for assessee after completing her studies, expenditure was not allowable as business expenditure - [2012] 20 taxmann 570 (Delhi) 2. Even though there is no period of limitation prescribed under section 153(3)(ii), yet Assessing Officer could not pass a consequential order after expiry of more than four years of passing a revisional order under section 263 - [2012] 20 taxmann 550 (Delhi) 3. Manner of Computation of period for which interest under section 158BFA is to be levied - [2012] 20 taxmann. 549 (Delhi) 4. Reasoned order should be passed on application for stay of demand - [2012] 20 taxmann 548 (Bombay) 5. In view of failure of assessee to prove circumstances which prevented it to file return within prescribed time period, levy of interest under section 234A was to be upheld - [2012] 20 taxmann 547 (Kerala) 6. Once Commissioner grants registration to a trust under section 12AA(1)(b)(ii) after satisfying himself about activities of trust, such a registration cannot be cancelled by following very same provision of section 12AA(1)(b) to go into genuineness of activities of trust - [2012] 20 taxmann 546 (Madras) 7. In case of approval of sale consideration by appropriate authority under provisions of Chapter XXC, no enhancement could be made to same by DVO on matter being referred to him by Assessing Officer - [2012] 20 taxmann 543 (Delhi) 8. Deduction under section 80HHC was not available to assessee in respect of goods sold to designated consignees of UNICEF stationed in India - [2012] 20 taxmann 542 (Delhi) 9. An injunction/stay order passed during pendency of assessment proceedings does not on its own or by deeming fiction, extend period stipulated in order passed under section 281B - [2012] 20 taxmann 540 (Delhi) 10. Payment of royalty to a company for use of technology and technical information for a prescribed period would not amount to capital expenditure - [2012] 20 taxmann 509 (Delhi) 11. Unless it is factually examined as to whether sum received in violation of section 269SS is loan or deposit, no penalty can be levied - [2012] 20 taxmann 508 (Delhi) 12. Where sum recovered during search was not reflected in books of account of assessee, same could be brought to tax as undisclosed income in block assessment even though regular assessment continued separately - [2012] 20 taxmann 507 (Delhi) 13. As per the provisions of section 115A(1)(b), the rate of tax on royalty payments in connection with the agreements entered into before 1-6-2005 is 20% and the tax agreements entered into on or after 1-6-2005 is 10%. These tax rates have been prescribed separately under sub-clause (A) and sub-clause (B). • Each of these sub-clauses are mutually exclusive and independent of each other and create or provide for a charge of income tax under section 4 of the Act. A foreign company has to, therefore, compute tax on its income under each of the above sub-clause separately and the tax so computed has to be aggregated as per the mandate of section 115A(1)(b) which provides that \'the income tax payable shall be the aggregate of.\' • The above expression which provides for the aggregation of tax computed under each of the sub-clauses (A), (AA), (B), (BB) and (C) indicate that the charge of tax provided under the above sub-clauses are separate and independent and support the proposition that royalty income in respect of the agreement entered into before 1-6-2005 are from one \'source\' and royalty income in respect of agreements entered into on or after 1-6-2005 are from a different \'source\'. The contracts or agreements being the source of income have been entered into on different dates and the statute recognizes such time differentiation and provides separate tax rates for each such stream. Therefore, it is not correct to compare the tax on royalty income as per the Act and as per the Treaty on an aggregate basis - [2012] 20 taxmann 728 (Bangalore - Trib.)

 
 

01 May, 2012


TDS on cross-border payments rose 96% in FY12

Even as the $2 billion (Rs.10,500 crore today) tax spat between Vodafone Group Plc and the Indian government is yet to be settled, companies based in Mumbai have been playing it safe by voluntarily deducting tax at source on their international transactions.The international taxation wing of the income-tax (I-T) office in Mumbai saw a 96% jump in TDS (tax deducted at source) collections on cross-border payments in fiscal 2011-12 (FY12)—from Rs.4,637 crore in FY11 to Rs.9,067 crore in FY12, according to three senior I-T department officials who declined to be named as the data is yet to be made public.A cross-border payment is any money (interest, capital gains, royalty, income arising in India) payable to a non-resident individual or company.“In 2011-12, we saw a 96% growth in TDS collections from cross-border payments under section 195 of the I-T Act. It is nothing but the ripple effect of(the) Vodafone case,” said one of the three I-T officials cited above.

 
 

30 Apr, 2012


Amendments in transfer pricing provisions need to be reviewed

Transfer Pricing (TP) Provisions were introduced in India by the Finance Act 2001. The TP Provisions were introduced with an intent to protect India’s right to collect a fair share of tax in respect of cross border transactions. In simpler terms, TP Provisions were introduced to ensure that an international transaction between two associated enterprises is made at an arm’s length price so that both the countries involved get a proper share of profits in their respective jurisdiction. The term “international transaction” has been defined in section 92B of the Income-tax Act. Prior to the amendment proposed by the Budget 2012, the section provided that besides the specific transactions contained in the section, any other transactions which have a bearing on the profit, income, losses or assets shall also be treated as international transaction. Section 92 of the Income-tax Act (which is the charging section for transfer pricing) provides that any income arising from an international transaction shall be computed having regard to the arm’s length price (ALP).Keeping in view the aforesaid provisions, the Indian courts have taken a view that until there is any income arising from an international transaction which is chargeable to tax in India, the provisions of transfer pricing will not apply. For example in the case of business restructuring it was held that TP provisions will not apply (see Dana Corporation, In re, 321 ITR 178 (AAR)). Accordingly, while filing an audit report on transfer pricing (Form 3CEB) along with the Return of Income, in most of the cases, only those transactions would have been reported which were considered as having any bearing on the profit, income or losses. Form 3CEB upto assessment year 2011-12 would have already been filed by the assessees with the Income-tax Department.

 
 

30 Apr, 2012


I-T refunds hit record high, jump by 32 pc

Despite dismal tax collections, the government disbursed close to Rs one lakh crore in income-tax refunds during 2011-12 financial year, the highest ever payment to tax-payers, recording a 32.4 per cent increase from the Rs 74,000 crore refunds during 2010-11.The figure is estimated to touch Rs 1.20 lakh crore in the current financial year, as the number of those who file e-returns increases, a revenue department official told The Indian Express.Explaining the record increase in payment of refunds, the official said ever since the Central Processing Centre (CPC) in Bangalore started functioning to full capacity in April 2010, the time taken to process refunds has reduced sharply and has helped the department to cope with the rapid growth in the number of tax-payers. The government is setting up two more CPCs — in Pune and Manesar.Moreover, as the number of e-return filers increases, the refunds will increase, as the computer-based system generates refunds automatically. During the last financial year, of the over three crore tax-payers, 1.64 crore filed e-returns as against 90,500 in 2010-11. “This number is likely to go up to 2.5 crore t

 
 

30 Apr, 2012


Taxing times ahead for software makers, channel partners

With the Union finance ministry unwilling to roll back its proposed tax amendments with regard to sale of software, it is not only the big boys like Microsoft, Adobe or Oracle who will feel the heat. Indian companies importing the software also fear their burden may go up, even as tax authorities are confident the proposed changes will not push up software prices.The Finance Bill 2012 proposes to categorise as ‘royalty’ the income accruing to a non-resident company from the sale of software. It would, thus, subject the transaction to withholding tax, currently levied at 20 per cent of the gross purchase amount. Authorities in India cannot tax business income of these foreign firms, as they do not have a presence in India. Instead, they can classify the payment as royalty and tax it in India.

 
 

30 Apr, 2012


Circular No.10/2012-Customs

                Circular No.10/2012-Customs    

 

 

F.No.401/16/2012-Cus.III

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

 

 North Block, Room No. 253-A,

New Delhi, the 29th March 2012.

To,

 

All Chief Commissioners of Customs/Customs (Prev.),

All Chief Commissioners of Customs & Central Excise,

All Commissioners of Customs/Customs (Prev.),

All Commissioners of Customs & Central Excise.

 

Subject:-  Refund of 4% CVD (SAD)-Extension of time upto 30th June 2012,  for using re-credited 4% CVD (SAD) amount in DEPB-Regarding.

 

Sir / Madam,

            Your kind attention is invited to the Circular No.02/2012-Customs, dated 16-02-2012, regarding procedure on refund of 4% CVD (SAD). The above Circular provides the facility of manual filing of Bill of Entry for utilizing the amount of re-credited 4% CVD refunds (SAD) for payment of duty in case of re-credited DEPB/ Reward Scheme scrips upto 31-03-2012.

2.         The matter has been examined in consultation with Director General of Foreign Trade (DGFT) and it has been decided to extend time limit for using re-credited DEPB scrips/ Reward Scheme scrips in case of 4% CVD (SAD) upto 30-06-2012.

3.         Board also directs all Chief Commissioner of Customs to ensure that all pending application for refund of 4% SAD paid through DEPB/reward scrips are disposed of by 30-04-2012. The Chief Commissioner may constitute a special team to liquidate these refund claims. The report in this regard should be sent to Board by 04-05-2012.

 

4.         Board also reiterates Para 8 of Board’s Circular No. 27/2010-Customs, dated 13-08-2010 wherein it was mentioned that in the interest of ensuring expeditious grant of refund of 4% SAD, the importers may be advised to make the initial payment of 4% CVD in cash. DGFT has also informed that no re-crediting shall be done if such payment is made by means of scrips. In other words, in future exporters should pay SAD component in cash if they want a refund.

                                                        

5.         A suitable Public Notice and Standing Order may be issued for the guidance of the trade and staff. 

  Yours faithfully,

 

 

(Vikas)

Under Secretary (Customs-III/VI)

 
 

30 Apr, 2012


Notification No.38/2012- Customs (N.T.)

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, PART-II, SECTION 3, SUB-SECTION (ii), EXTRAORDINARY]

 

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

 

Notification No.38/2012- Customs (N.T.)

 

Dated the 26th April, 2012

6 Vaisakha, 1934(SAKA)

 

S.O.       (E). – In exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and in super session of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.26/2012-CUSTOMS (N.T.), dated the 28th March, 2012 vide number S.O. 625 (E), dated the 28th March, 2012, except as respects things done or omitted to be done before such super session, the Central Board of Excise and Customs hereby determines that the rate of exchange of conversion of each of the foreign currency specified in column (2) of each of Schedule I and  Schedule II annexed hereto into Indian currency or vice versa shall, with effect from 1st May, 2012 be the rate mentioned against it in the corresponding entry in column (3) thereof, for the purpose of the said section, relating to imported and export goods.

 

SCHEDULE-I

 

S.No.

Foreign Currency

Rate of exchange of one unit of foreign currency equivalent to Indian rupees

(1)    

(2)

(3)

 

 

               (a)

                (b)

 

 

(For Imported Goods)

  (For Export Goods)

1.

Australian Dollar

54.95

53.70

2.

Canadian Dollar               

54.05

52.65

3.

Danish Kroner

9.50

9.20

4.

EURO

70.35

68.70

5.

Hong Kong Dollar

6.85

6.75

6.

Norwegian Kroner

9.35

9.05

7.

Pound Sterling

86.00

84.15

8.

Swedish Kroner

7.95

7.70

9.

Swiss Franc

58.50

57.10

10.

Singapore Dollar

42.70

41.80

11.

US Dollar

53.10

52.25

         

 

                                   

 

 SCHEDULE-II

                       

S.No.

Foreign Currency

Rate of exchange of 100 units of foreign currency equivalent to Indian rupees

(1)    

(2)

(3)

 

 

(a)

(b)

 

 

(For Imported Goods)

  (For Export Goods)

1.

Japanese Yen

65.50

       63.85

         

 

 

[F.No.468/07/2012-Cus.V]

                                               

 

(abhinav gupta)

Under Secretary to The Govt. of India

tele: 2309 4610

 
 

25 Apr, 2012


Unlike others, LIC can pick up over 10 per cent stake in companies, clarifies finance ministry

India\'s biggest investor in equities, the Life Insurance Corporation of India, or LIC, can pick up more than 10% equity in companies against the sector rules set by the insurance watchdog as it is governed by a separate law, a finance ministry official has clarified.The insurer\'s high stakes in the many companies had raised concerns after it picked up 4.4% equity in ONGC in the recent government auction, taking its total stake in upstream oil major to 9.5%.The insurance watchdog, Insurance Regulatory and Development Authority (IRDA), had in 2008 amended investment norm that prohibit an insurer from having more than 10% stake in a company.LIC is governed by a separate law, the Life Insurance Corporation Act, 1956, that allows the insurer to acquire up to 30% equity in companies after prior government approval, the official told ET.\"We are not asking LIC to breach IRDA norms but if they feel there is a good business proposition, the law allows it,\" the official added.

 
 

25 Apr, 2012


RBI rate cut: Will the joy be short-lived

Even the Confederation of Indian Industry (CII) did not celebrate much the summer gift from the Reserve Bank of India governor Duvvuri Subbarao - a half percentage point cut in the benchmark interest rate. Because the joy may be short-lived. \"CII appreciates RBI\'s concern on future growth being constrained due to supply-side bottlenecks in infrastructure, energy, minerals and labour. CII has been strongly advocating de-bottlenecking supply-side constraints,\" was the measured reaction from the lobby group. It is an admission of the fact that rates alone did not deter investment for the past few quarters. So, what will the cheaper money lead to when many parts of the macro-economy are faltering. The cut is aimed at reviving economic growth that has fallen \'modestly\' below the trend growth, says Subbarao. But for the best part of the past week, he answered more queries on why there won\'t be many such cuts this year. Some called the rate action a \'growth booster\' and others \'a great gamble\'. Unlike in the past, there is indeed skepticism whether the central bank\'s action will have the desired effect. Most of the factors that RBI has been pointing to as a drag - the fiscal deficit, widening current account deficit, suppressed inflation - have not vanished. Indeed, the external trade position is deteriorating and a demand booster could accelerate the slide.

 
 

24 Apr, 2012


E-filing of tax returns must if annual income more than R10 lakh

provided by notification No 9/2012, dated February 17, 2012, is not applicable to a salaried taxpayer who has earned income from more than one employer during the financial year.I am told that a buyer will have to deduct tax while making payment to the seller for the purchase of an immovable property. Will the buyer have to obtain any TAN or file a TDS return?The Finance Bill 2012 has inserted a new Section 194LAA to provide that a buyer will deduct tax at 1% of the sum at the time of making payment or crediting any sum, whichever is earlier, by way of consideration for transfer of immovable property (other than agricultural land) provided the total consideration exceeds R50 lakh if the property is situated in a specified urban area.

 
 

24 Apr, 2012


COMPANY LAW

1. Authorities issuing money lenders licence to company-in-liquidation in lieu of deposit certificate could not be held liable for any lapse when deposits matured prior to winding up - [2012] 20 taxmann 410 (Karnataka) 2. Where amount claimed in respect of machineries supplied by company-in-liquidation had been rejected by respondent-company, application praying for grant of decree against respondent for said amount was to be dismissed - [2012] 20 taxmann 409 (Karnataka)

 
 

24 Apr, 2012


RELEVANT TAX CASES INCOME TAX

1. Where Assessing Officer without making any independent enquiry to disprove creditworthiness of creditors, made addition contrary to creditors\' statements and affidavits, addition was to be deleted - [2012] 20 taxmann 137 (Chattisgarh) 2. Application for stay of demand should be decided by Commissioner (Appeals) after taking due note of submission which had been made by assessee regarding additions made by Assessing Officer - [2012] 20 taxmann 145 (Bombay) 3. Interest tax collected by a credit institution cannot partake character of chargeable interest and, thus, no interest tax would be exigible on it - [2012] 20 taxmann 139 (Punjab and Haryana) 4. Expenditure incurred by assessee-company for maintenance of accommodation provided to its employees on rental basis cannot be treated as fringe benefit and hence fringe benefit tax cannot be levied on same - [2012] 20 taxmann 142 (Karn) 5. Reduction of waiver of loan granted to meet cost of assets from actual cost is not required u/s 43(1)(Expln10) for calculating depreciation since Explanation 10 covers subsidy or reimbursement and not waiver of loan; however, where assessee reduces loans waived from cost of assets for accounting purposes, same will be reduced from actual cost to calculate depreciation u/s 32 also as such accounting practice will show that assessee understood receipt of loans from Government as having been given towards meeting part of cost of assets and will bring assessee\'s case within mischief of main provision of section 43(1) itself and it will not even be necessary to invoke Explanation 10 to section 43(1) • Manner in which entries are made in books of account is not conclusive of question, which has to be resolved on a true interpretation of provisions of law • However, real nature of a transaction can be understood by reference to contemporaneous act of parties, which would throw considerable light on their true intention and their understanding of transaction; it is therefore not impermissible to look into entries made in books of account, in absence of any other evidence; they show that assessee understood receipt of loans from Government as having been given towards meeting a part of cost of assets - [2012] 20 taxmann 198 (Delhi) 6. Any \"transfer\" as defined in section 2(47) of the Income-tax Act (\"the Act\") which gives a wide and inclusive definition of transfer shall qualify as \'slump sale\' if it satisfies conditions of section 2(42C) which defines \'slump sale \' • Even a transfer under a scheme of arrangement sanctioned by Court under sections 391 to 394 of the Companies Act,1956 shall qualify as a slump sale if it satisfies conditions of section 2(42C) of the Act. • The contention that \"section 50B read with section 2(42C) is only applicable to \"sale\" in a narrow sense and not to \'transfer\' under section 2(47) of the Act\" cannot be accepted. • The decision of the Supreme Court in J.K. (Bombay) (P.) Ltd. v. New Kaiser-I-Hind Spinning and Weaving Co. Ltd. [1970] 40 Comp. Case 689 (SC) is on the general proposition as to statutory nature of the scheme sanctioned under sections 391 to 394 of Companies Act,1956 and is not relevant for interpreting \'transfer\' as defined in section 2(47) of the Act. There is another reason why this decision should not be applied. The Act i.e. Income-tax Act, 1961 was enacted to tax the income or gains made by an assessee. The Companies Act, 1956, on the other hand serves, and is intended to serve a different purpose and, therefore, when a scheme under sections 391-394 of the Companies Act, 1956 is sanctioned by the Court, it is treated as a binding statutory scheme the because the scheme has to be implemented and enforced. This cannot, or is not, a ground to escape tax on \'transfer\' of a capital asset under and as per provisions of the Act. - [2012] 20 taxmann 476 (Delhi)

 
 

23 Apr, 2012


Defence ventures with foreign entities to face closer scrutiny

With the rising role of private sector in defence production, the government is planning guidelines for defence sector joint ventures (JVs) between Indian and foreign firms. Government sources said these will be similar to foreign direct investment (FDI) norms for defence collaborations in certain developed countries.The idea is to institute security and auditing procedures for JVs and their supply chains. According to the ministry of defence (MoD), the norms will apply to JVs based on their ‘threat perception’ and the sensitivity of products to be manufactured. Such JVs will have to seek prior separate security clearances from the home ministry regarding subsidiaries, directors and foreign nationals (if engaged).The new security measures and check lists emerged after two recent FDI proposals came up for scrutiny before the defence and home ministries.

 
 

23 Apr, 2012


Coal India could get to pass on cost of expensive imports

The government is weighing a new coal pricing dispensation to help Coal India (CIL) recover the extra cost of imported coal it might have to give power plants to comply with the fuel supply agreement (FSA). The agreement means Coal India must guarantee supply of at least 80% of fuel required by these plants. Government sources said a committee of secretaries led by Pulok Chatterjee, principal secretary to the Prime Minister, has been mandated to evolve a pricing dispensation where power companies will have to bear the extra cost of imported coal to the extent of difference in the quality of imported and domestic coal.The quality of imported coal is much superior to domestic coal. For example, the ash content in domestic coal can be as high as 40%, compared with 10% in imported coal.

 
 

23 Apr, 2012


Govt may cut capital gains tax on PEs\' unlisted stocks to 10%

The finance ministry is set to halve the tax burden to keep alive the interest of private equity (PE) players, who constitute the biggest foreign direct investor group in India.The ministry is prepared to lower long-term capital gains tax on unlisted stocks to 10% for PEs, government sources told ET, since equity infusion by PEs helps startups and mid-sized firms to grow.The proposed change will put PEs at par with foreign institutional investors, who currently enjoy a concessional long-term capital gains tax rate of 10% on gains from unlisted or off-market share transfers. (For listed securities, there is no tax on long-term capital gains for transactions taking place on stock exchanges.)A senior government official said the revenue department, which vets taxation proposals, has been taken on board and if it passes muster, the change in tax rate will feature in the official amendments to the Finance Bill, 2012.This will also soften the tax blow for PE investors who fail to comply with the General Anti-Avoidance Rules, or GAAR, proposed in the Union Budget.The sweeping changes proposed in tax laws in the budget have unsettled the PE fraternity as they are long-term investors, putting a large part of their money in unlisted stocks. If the Finance Bill is passed unchanged, PE investors who come in through tax havens such as Mauritius, but fail to comply with GAAR, will have to pay a long-term capital gains tax as high as 20% when they sell the shares of these closely held companies. GAAR is aimed at curbing aggressive tax avoidance through sophisticated financial structures.

 
 

23 Apr, 2012


Non-residents\' consortium to be taxed in India as AOP: AAR

A consortium formed by non-residents to bid for a turnkey project in India is liable to be taxed in India as Association of Persons (AOP), according to Authority for Advance Ruling (AAR). The AAR, a quasi judicial body for deciding tax disputes involving foreign entities, held that the consortium will be treated as AOP even if the members have divided the responsibility of the business among themselves. An AOP is generally understood as an association of two or more entities formed for the purpose of carrying out a particular task. An explanation furnished in 2002 for Section 2 (31) of the Income-tax Act says that AOP shall be deemed to be a person, whether or not such a body was formed with the object of deriving income, profit or gains. The consortium in this case was floated in response to a tender floated by ONGC Petro Additions Ltd (OPAL) for design, engineering, procurement, construction, installation, commissioning and handing over of the plant for the dual-feed cracker and associated units.The consortium, comprising the taxpayer company-Munich-based Linde AG and Samsung Engineering Company, Seoul-won the bid for this contract and entered into an agreement with OPAL for handing over of the plant on a turnkey basis. The taxpayer company took the position that it cannot be treated as AOP (which is a single entity) since the contract of the consortium has to be split into many parts and the consideration for work is payable by OPAL directly to each member for the work done by it.

 
 

20 Apr, 2012


Bipa excludes tax issues: FinMin on Vodafone notice

The government may tell Vodafone its notice under the bilateral investment promotion and protection agreement (Bipa) would be invalid, as the treaty did not cover tax issues.A finance ministry official said the Bipa specifically excluded Vodafone-like tax transactions under Article 4(4) of the treaty and, hence, the notice served by the Netherlands subsidiary of the British telecom company was invalid. “If taxation issues were covered under the Bipa, there would be no need to sign double taxation avoidance agreements. Bipa is mainly aimed at ensuring fair and equitable treatment for foreign investors, as it is given to domestic investors, and such foreign investments are not nationalised,” said the official.Contacted by e-mail, Vodafone said, “The treaty explicitly applies to indirect investments and our transaction, therefore, is clearly one which qualifies for treaty protection. Vodafone believes if the retrospective tax proposals were enacted, it would amount to a denial of justice and a breach of the Indian government’s obligations under the BIT with the Netherlands to accord fair and equitable treatment to investors.”However, paragraph 4 of Article 4 says the provisions of the treaty “in respect of grant of national treatment and most-favoured nation treatment shall not apply in respect of any international agreement or arrangement relating wholly or mainly to taxation.”

 
 

20 Apr, 2012


Notification No. 27 /2012-Customs

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

     

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

 

Notification No. 27 /2012-Customs

New Delhi, the 18th April, 2012

 

 

     G.S.R.  (E). - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962),  the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 9/2012-Customs, dated the 9th March, 2012  which was published in the Gazette of India, Extraordinary, vide G.S.R. 129 (E) dated the 9th March, 2012, namely:-

In the said notification, for the Explanation and the entries relating thereto, the following shall be substituted, namely,-

Explanation. -  (1) For the purposes of condition No. v), a variance not exceeding +_ 1 mm in height and circumference and not exceeding +_ 1 cent in weight shall be allowed.

 (2)For the purposes of this notification, “Foreign Trade Policy” means the Foreign Trade Policy, published by the Government of India in the Ministry of Commerce and industry, vide notification No.1/2009-2014, dated the 27th August, 2009, as amended from time to time.

F.No.354/4/2012-TRU

 

 

[Raj Kumar Digvijay]
Under Secretary to the Government of India

 

Note. - The principal notification No. 9/2012-Customs, dated the 9th March, 2012 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.129 (E) dated the 9th March, 2012.

 
 

20 Apr, 2012


COMPANY LAW

1. Story of DIL Company and its reference to BIFR is a classic case of misuse of Sick Industrial Companies (Special Provisions)Act,1985 (1985 Act) only to enjoy temporary immunity recognised by section 22(1) of Act and to stretch period of invulnerability to as long as possible

Company DIL got out of BIFR by making its negative net worth positive by revaluing its assets and getting a favourable order from Madras High Court in a writ petition filed under Article 226 of Constitution; Court read 1985 Act to imply that there was no necessity to apply "for de-registration of a reference when net worth becomes positive wiping out accumulating losses .(and) there is no question of BIFR being concerned with sick company any longer" order(though dismissing writ petition)had incidental effect of absolving company of any obligation to explain its conduct of alienating its immovable properties without so much as a "by your leave" of BIFR

Company DIL did not get money against transfer of Ambattur land to group company DPL(only been incorporated about a year back and not doing any business); it only got some worthless paper(shares) in a useless company(DPL) as consideration for transfer which dud paper it transferred to a Mauritius company against a consideration that is not known as company does not volunteer any information in such regard; petitioning-creditor\'s perception of daylight robbery in company is vindicated and transaction lends support to petitioning-creditor\'s request for a provisional liquidator to be immediately appointed over company; ambattur property transaction was not a solitary, one-off case; there were three more such instances

The 4 asset-stripping transactions attract provisions of section 531 of Companies Act,1956 which deems certain transfers as fraudulent preference; these transactions also attract section 53(1) of Transfer of Property Act which prescribes that every transfer of immovable property made with intent to defeat or delay creditors of transferors shall be voidable at option of any creditor so defeated or delayed; since four transactions were fraudulent, title therein may not be deemed to have passed at all from company - [2012] 20 taxmann 33 (Calcutta)

 
 

20 Apr, 2012


RELEVANT TAX CASES INCOME TAX

1. Interest accruing to Swedish Exports Credit Guarantee Board not taxable due to MFN clause of India - Sweden Protocol - Taxability of interest under Article 11(3) of Indo-Sweden DTAA. - [2012] 20 taxmann 53 (AAR - New Delhi)

2. Where Assessing Officer made addition to assessee\'s income on estimated basis and assessee accepted addition only with sole intention to avoid litigation, levy of penalty upon assessee under section 271(1)(c) was unjustified -
[2012] 20 taxmann 133 (Hyderabad - Trib.)

3. Order passed by Assistant Commissioner rejecting stay application filed by assessee against rectified demand notice without considering circulars and judgments cited by assessee was to be quashed and matter be remanded to him for consideration afresh - [2012] 20 taxmann 192 (Rajasthan)

4. Sub-section (7) of section 94 cannot be applied while computing book profit for purpose of section 115JB - [2012] 20 taxmann186 (Gujarat)

5. Deduction under section 35D is allowable in respect of fees paid to Registrar of Companies and expenses on public subscription of shares
- [2012] 20 taxmann 191 (Karnataka)

6. Section 195A does not bar oral agreements or arrangements for payment of tax free incomes

In provisions of section 195A, there is reference to agreement or arrangement for payment of tax free income; however, section 195A does not say that such an agreement or arrangement has to be in writing, therefore, agreement or arrangement can be oral also.

From fact that assessee has failed to deduct tax at source and has made provision for such payment of tax at end of year, it is to be presumed that there is an arrangement for paying tax free income to labourers. - [2012] 20 taxmann 344 (Bangalore - Trib.)

 
 

20 Apr, 2012


RELEVANT TAX CASES INCOME TAX

1. Assessee entitled to Rs. 1 crore deduction under section 54EC if he transfers capital asset after 30th September of a financial year and makes capital gain of Rs.1crore or more and invests Rs. 1 crore in specified bonds within 6 months of transfer-Rs.50 lakhs in financial year of transfer and Rs.50 lakhs in next financial year

• It is clear from proviso to section 54EC(1) that where assessee transfers his capital asset after 30th September of financial year he gets an opportunity to make an investment of Rs.50 lakhs each in two different financial years and is able to claim exemption upto Rs.1 Crore under section 54EC of Act; since language of proviso is clear and unambiguous, assessee is entitled to get exemption upto Rs.1 Crore

• Where in next financial year no issue of specified bonds is open for subscription within 6 months time-limit, he can claim deduction if he invests Rs.50 lakhs on very first day an issue of specified bonds becomes open
Related cases:

Ram – Agarwal v. Jt. CIT 81 ITD 163 (Mum. - Trib.)

Asstt. CIT v. Shri Raj Kumar Jain & Sons (HUF) [2012] 19 taxmann 27 (Jp. - Trib.) - [2012] 20 taxmann 75 (Ahmedabad - Trib.)

2. Mere hiring of vehicle/plant or machinery/equipment where contractee is to only make available vehicle etc. and not required to do any work would attract TDS under section 194-I and not under section 194C

• Section 194C is applicable in respect of cases where there is a contract for carrying out any work in pursuance of a contract between contractor and persons enumerated in section 194C of Act

• In case it is a mere hiring of equipment, plant or machinery or vehicle (where contractor has only to make available equipment, plant or machinery or vehicle and not required to do any work), provisions of section 194-I would come into operation and in that case, assessee has to deduct tax at rate of 10 per cent - [2012] 20 taxmann 76 (Cochin - Trib.)

3. An order under section 254(2) does not have existence de hors the order under section 254(1), so that it recall is impermissible under section 254(2) -
[2012] 20 taxmann 57 (Cochin - Trib.)

4. Interest under section 234A is to be computed by excluding amount of tax actually deducted while interest under sections 234B and 234C are to be charged by excluding tax, which was deductible - [2012] 20 taxmann 54 (Chennai - Trib.)

5. Explanation 10 to section 43(1) is prospective in nature applicable to depreciable assets after 1-4-1999 - [2012] 20 taxmann 143 (Kerala)

6. Assessee having followed a reasonable basis of valuation of closing stock, which had been regularly followed and accepted by department in earlier years and in subsequent year and GP rate declared by it being higher than GP rate declared in immediate preceding year, addition made in assessee\'s hand on account of undervaluation of closing stock was not justified - [2012] 20 taxmann 144 (Delhi)

7. Primary condition for applicability of section 50 of Act is that asset transferred should be a depreciable asset on which depreciation was actually allowed under Act; this section is applicable only in respect of sale of a capital assets forming part of a block of asset in respect of which depreciation has been allowed

• As no rate of depreciation has ever been prescribed for land, it is not part of \'block of assets\' as defined in section 2(11)

• As land in question was held from April, 2001 to August, 2005 for a period of more than 36 months (and as deeming provisions of section 50 are not applicable to transfer of land), surplus of sale price over indexed cost of acquisition was rightly shown as long term capital gains by assessee and exemption under section 54EC available since assessee had invested in REC Bonds

 
 

19 Apr, 2012


States want four categories moved to negative list

States have asked the Centre not to levy service tax on hotel and restaurant services, entertainment and DTH services, and work contracts and leasing until the Goods and Services Tax (GST) is introduced.States are likely to start using the IT platform of GST (GSTN) for collection of Value Added Tax (VAT) by September.Mr Sushil Kumar Modi, Chairman of the Empowered Committee of State Finance Ministers, said: “Sectors such as hotels and restaurants, entertainment and DTH services and work contracts and leasing are attract taxes levied by both the States and the Centre. That is why we are requesting the Centre to bring these into the negative list of service tax till the introduction of GST.”Once the GST is introduced, these would automatically be brought under tax as the States would get the right to levy service tax. At present, given the prevailing duality, it is the end-user who suffers, Mr Modi said.He cited the example of bills in hotels and restaurants. The Centre levies service tax of 30 per cent of the bill amount while States levy value-added tax (VAT) at an average 10 per cent rate on the entire bill amount.Similarly, for DTH, the Centre levies tax at 12 per cent while the States impose a duty of 10 per cent.

 
 

19 Apr, 2012


Top software MNCs lobby against software tax changes in the Budget; warn of cut in investments

The world\'s top software companies have enlisted America\'s biggest law firm to lobby with Prime Minister Manmohan Singh against software tax changes proposed in the Union Budget.Baker & McKenzie, writing on behalf of the Software Coalition group, which includes Microsoft, Oracle and Adobe, warned that if the tax changes are implemented, software companies could reconsider the amount they are willing to invest in India."To impose new rules with retroactive effect to 1976 under the guise that they are clarifications violates fundamental notions of fairness," the law firm\'s partner, Gary D Sprague, wrote in an April 10 letter also marked to Finance Minister Pranab Mukherjee, Law Minister Salman Khurshid and Commerce Minister Anand Sharma.The global software industry is the latest to join in the chorus of protests against the numerous retroactive amendments proposed in Budget 2012. On Tuesday, the UK\'s Vodafone Group told the government it intends to start arbitration proceedings against a proposal to use retrospective amendments to tax its acquisition of Hutchison Essar in 2007.In recent weeks, several global trade bodies have also cautioned the government against retroactive amendments to tax laws saying such a step could affect investments in India.

 
 

19 Apr, 2012


F.No. 437/08/2012-Cus. IV

F.No. 437/08/2012-Cus. IV

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

*****

 

New Delhi, dated the 17th April, 2012.

 

ORDER

 

In exercise of the powers conferred under the Notification No. 01/2003-Customs (N.T.) dated 3rd January, 2003 read with Notification No.37/2003-Customs (N.T.) dated 3rd June, 2003 issued under sub-section (1) of section 4 of the Customs Act, 1962 (52 of 1962), the Board hereby assigns the Show Cause Notice F.No. 50D/11/2011-CI (Pt.I) dated 24.01.2012 issued in case of M/s Chimes Aviation Pvt. Ltd. & Others by the Additional Director General, Directorate of  Revenue Intelligence, New Delhi, to the Commissioner of Central Excise (Adjudication), New Custom House, New Delhi for adjudication.

                                                                                                         

 

 

(Vikas)

Under Secretary to the Government of India

 

Copy to:

1.     The Additional Director General, Directorate of Revenue Intelligence, 7th Floor, ‘D’ Block, I.P. Bhawan, I.P. Estate, New Delhi;

2.     The Commissioner of Customs, Inland Container Depot, Tughlakabad, New Delhi;

3.     The Commissioner of Customs, Import & General, New Custom House, Near IGI Airport, New Delhi;

4.     The Commissioner of Customs, Air Cargo Complex, Kolkata;

5.     Webmaster.cbec@icegate.gov.in


 

 
 

19 Apr, 2012


Notification No. 26/2012 - Customs

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)] 

Government of India

Ministry of Finance

(Department of Revenue)

 

Notification No. 26/2012 - Customs 

 

New Delhi, the 18th April, 2012  

 

            G.S.R.305 (E). - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962),  the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2012-Customs, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, vide G.S.R. 185(E) dated the 17th March, 2012, namely:-

       

    In the said notification,-

 

(i)   in the Table, for S. No. 145 and the entries relating thereto, the following shall be substituted, namely:-

 

“145.

2716 00 00

Electrical energy removed from a Special Economic Zone into Domestic Tariff Area or non processing areas of Special Economic Zone

(a) if removed from power projects of 1000 MW and above,-

(i) using imported coal as fuel;

(ii) using domestic coal as fuel;

(iii) using domestic gas as fuel;

 

(b) if removed from power projects of less than 1000 MW,-

(i) using imported coal as fuel;

(ii) using domestic coal as fuel;

(iii) using domestic gas as fuel;

 

 

 

 

Rs. 30 per 1000 kwh

Rs. 30 per 1000 kwh

Rs. 120 per 1000 kwh

 

 

Nil

Nil

Rs. 60 per 1000 kwh

 

 

 

 

-

-

-

 

 

-

-

-

 

 

 

 

-

-

-

 

 

-

-

-”

 

(ii)  in the ANNEXURE, in condition no. 35, for clause (b) of para 1, the following shall be substituted, namely:-

“(b) the total quantity of gold under items (i) and (ii) of Sr. No. 321 does not exceed one kilogram and the quantity of silver under Sr. No. 322 does not exceed ten kilograms  per eligible passenger; and

 

 [F. No. 354/40/2010-TRU]

 

 

 [Raj Kumar Digvijay]
Under Secretary to the Government of India 

 

Note.- The principal notification No. 12/2012-Customs, dated the 17th March, 2012, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 185(E), dated the 17th March, 2012 and was last amended by notification No. 25/2012-Customs, dated the 30th March, 2012  published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 273 (E), dated the 30th March, 2012.

 
 

19 Apr, 2012


F.No. 437/09/2012-Cus. IV

F.No. 437/09/2012-Cus. IV

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

*****

 

New Delhi, dated the 17th April, 2012.

 

ORDER

 

In terms of Notification No. 15/2002-Customs (N.T.) dated 07.03.2002 (as amended) issued under sub-section (1) of section 4 of the Customs Act, 1962 (52 of 1962), the Board hereby assigns the Show Cause Notice DRI F.No. 30/ KOL/ APP/ 2011/ 3395-99 dated 03.10.2011 issued by Additional Director General, Directorate of  Revenue Intelligence, Kolkata Zonal Unit, Kolkata in the case of Shri Rajesh Kumar Gupta, Proprietor of M/s J.P. Enterprises, J.P. House, Nehru Road, Siliguri-734405 and others, to the Commissioner of Customs (Sea Port-Import), Custom House, 60, Rajaji Salai, Chennai, for the purpose of adjudication.

         

 

 

(Vikas)

Under Secretary to the Government of India

 

Copy to:

 

1.     The Additional Director General, Directorate of Revenue Intelligence, Kolkata Zonal Unit, 8, Ho Chi-Minh, Sarani, Kolkata-700 071;

2.     The Commissioner of Customs (Sea Port- Import), Custom House, 60, Rajaji Salai, Chennai-600 001;

3.     The Additional / Joint Commissioner of Customs (Port), 15/1, Strand Road, Custom House, 2nd Floor, Kolkata-700 001;

4.     Webmaster.cbec@icegate.gov.in.


 

 
 

19 Apr, 2012


Govt has 6 months to settle Vodafone tax dispute

The Centre has six months – till mid-October – to amicably settle the tax dispute with Netherlands-based Vodafone International Holdings BV (VIH), or face arbitration, say legal experts.By serving a notice on the Indian Government, VIH, a subsidiary of Vodafone, has acknowledged a tax dispute with Indian authorities on its $11.2-billion deal with Hutchison Whampoa in 2007. The notice was served under the India-Netherlands Bilateral Investment Treaty (BIT).While the Supreme Court had ruled in favour of Vodafone, the Indian Government now seeks to negate that ruling through retrospective amendments in the Income Tax law.The BIT applies to direct and indirect investments made by investors of either nation in the other\'s territory. The BIT says disputes should, if possible, be settled through negotiations. And if it cannot be settled after six months of the notice, it can be submitted to arbitration.Vodafone faces the prospect of a huge tax bill if the Government enacts the Finance Bill 2012 in the current form. The Bill seeks to make retrospective changes to several provisions in an apparent bid to bring indirect transfers of shares with underlying Indian assets in the income tax net.

 
 

17 Apr, 2012


Notification No. 32/2012 - Customs (N.T.)

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

 

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

 

Notification No. 32/2012 - Customs (N.T.)

 

New Delhi, dated the 11th April, 2012

 

G.S.R…..(E).- In exercise of the powers conferred by clause (aa) of sub-section (1) of section 7 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 12/97-Customs (N.T.), dated the 2nd April, 1997, published in the Gazette of India,  vide number G.S.R. 193(E), dated the 2nd April, 1997, namely:-

 

          In the said notification, in the Table, against serial number 6A relating to the State of Kerala, in column (3), after item (iii) and the entry relating thereto in column (4), the following item and the entry shall respectively be inserted, namely:-

 

 (3)

(4)

“(iv) Kannur

Unloading of imported goods and the loading of export goods.”

     

 

 

[F.No. 434/23/2010-Cus.IV]

 

 

 

(Vikas)

Under Secretary to the Government of India

 

Note:  The principal notification No. 12/97-Customs (N.T.), dated the 2nd April, 1997 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), vide  number G.S.R. 193(E), dated the 2nd April, 1997 and was last amended by notification No. 12/2012-Customs (N.T.), dated the 27th February, 2012, vide number G.S.R. 107(E), dated the 27th February, 2012.

          

 
 

17 Apr, 2012


Notification No.21/2012-Customs (ADD)

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]                                                          

 

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

 

Notification

No.21/2012-Customs (ADD)

             

New Delhi, dated the 12th  April, 2012

           

            G.S.R.  (E). -Whereas, the designated authority vide notification No. 15/7/2011-DGAD, dated the 23rd March, 2012, published in Part I, Section 1 of the Gazette of India, Extraordinary, dated the 23rd March, 2012, had initiated review, in terms of sub-section (5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975) and in pursuance of rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the said rules), in the matter of continuation of anti-dumping duty on  imports of ‘Vitamin A Palmitate’, originating in, or exported from, China PR and Switzerland imposed vide  notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 112/2007-Customs, dated the 30th October, 2007, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 683(E), dated the 30th October, 2007, and had requested for  extension of anti-dumping duty upto one more year, in terms of sub-section (5) of Section 9A of the said Customs Tariff Act;

 

                                    Now, therefore, in exercise of the powers conferred by sub-sections (1) and (5) of Section 9A of the said Act and in pursuance of rule 23 of the said rules, the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 112/2007-Customs, dated the 30th October, 2007, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 683(E), dated the 30th October, 2007, namely: - 

 

                        In the said notification, at the end, the following shall be added, namely: - 

            “This notification shall remain in force up to and inclusive of the 27th day of March, 2013, unless revoked earlier”.

 

F.No.354/31/2007-TRU (Pt-I)

 

 

(Sanjeev Kumar Singh)

Under Secretary to the Government of India

 

 
 

17 Apr, 2012


Anti-dumping duty on imports of a chemical from EU likely

India is likely to impose anti- dumping duty of up to USD 490 per MT on imports of a chemical, mainly used in pharmaceutical and plastic industry, from European Union to protect domestic players from cheap shipments.In final findings, the Directorate General of Anti- dumping and Allied Duties (DGAD) has concluded that the domestic industry has "suffered material injury" due to the "dumped imports" of \'Pentaerythritol\' from European Union (excluding Sweden).The restrictive duty recommended by the DGAD will vary from USD 379 per MT to USD 490 per MT, the commerce ministry has said in a notification.The DGAD has also concluded that the product has been exported to India below its normal value, thus, resulting in dumping of the chemical, it said.It said the imports from EU (excluding Sweden) have increased significantly during the period of investigation (April 2009-June 2010).Imports of the chemical have increased to 6.935 MT during April 2009 and June 2010 from 256 MT in 2006-07, it said.The product is also used in the manufacture of printing inks, synthetic rubber, drying oils, detonators, explosives, and synthetic lubricants.The DGAD is a nodal investigation agency under the Commerce Ministry. However, a final call on imposition of the duty will be taken by the Finance Ministry.

 
 

17 Apr, 2012


CBDT pegs tax refunds at Rs 1.25 lakh crore

The finance ministry issued tax refunds of Rs 98,000 crore in 2011-12, as against Rs 74,000 crore in the previous year, as about half the country’s taxpayers filed their returns online. Higher online filing of returns that is expected in the ongoing financial year will enable faster processing of claims and hence a further increase in refunds. This time, though, the ministry will try to avoid cash problems for the government, as had happened in the initial months of last financial year.In 2011-12, as many as 16,400,000 taxpayers filed e-returns, compared to 90,500 in 2010-11, a jump of 82 percent.The Central Board of Direct Taxes (CBDT) now expects e-returns to touch Rs 2.5 crore in 2012-13, while refunds may increase to Rs 1.25 lakh crore.This year, however, the ministry will be cautious that refunds are staggered during the year. This is being done to avoid a situation like last year’s, when refunds of Rs 40,000 crore were issued in the first two months of 2010-11. The situation prompted the government to go for short-term borrowings to meet its immediate cash requirements.

 
 

13 Apr, 2012


High Court ruling on dividend income a relief for brokers

If a share broker takes a loan to buy shares and pays interest on it, he can adjust this expenditure against total trading profit, including tax-free dividend income, if the dividend income is incidental to his business of buying and selling shares.In such cases, the income-tax department cannot, by applying Section 14 of the Income Tax Act, bifurcate the trader\'s expense (interest on loan) proportionately between trading profit and dividend income and disallow the same on dividend income on the ground that while trading income is taxable, dividend income is exempt under Section 10 of the IT Act.Section 14 A states that any expense incurred on earning exempt income is to be disallowed. This was the sum and substance of a recent High Court of Karnataka ruling in the case of CCI, a distributor of state lotteries and a dealer in shares and securities, versus joint commissioner, income tax. The ruling went in favour of CCI and could provide relief to scores of stock traders who are not allowed to adjust expense against their trading profits on similar grounds.CCI, the assessee in this case, bought shares of certain companies and converted partly paid shares to fully paid ones by availing of an interest free loan for which it paid a broker some commission, which it showed as expenditure. Subsequently, CCI sold a major chunk of shares and got a trading profit, which was offered as business income and taxed. The remaining unsold shares earned tax-free dividend income.

 
 

13 Apr, 2012


Japanese buyer to withhold tax in Max Life deal

n an after-effect of the Vodafone tax case, MS&AD Insurance Group of Japan will withhold tax while buying 26 per cent stake in Max New York Life Insurance for Rs 2,731 crore.New York Life Insurance Company would make the capital gains. It said these should not be subject to tax in India, as it held the shares in the life insurance joint venture with Max India through a holding company in Mauritius. However, it has allowed the Japanese company to withhold the tax as a precaution and would file for a refund with the tax department later “The buyer is withholding tax on this transaction. There are complicated tax issues involved here (in India). We are going to pay 35 per cent tax in the US on our capital gain in this tax and we will get credit for tax we pay anywhere else. Our share in Max New York Life is through a Mauritius holding company and as per the India-Mauritius tax treaty, we do not believe there will be a tax payable in India,” said Michael Sproule, executive vice-president and chief financial officer of New York Life. The buyer, MS&AD, may have to withhold tax at 21 per cent of the capital gains made by New York Life. The latter is selling 16.63 per cent holding to MS&AD and the remaining 9.37 per cent to Max India for Rs 182 crore. MS&AD will buy the 9.37 per cent from Max India for Rs 984 crore.

 
 

13 Apr, 2012


RELEVANT TAX CASES INCOME TAX

 

1. As amended provisions of section 80HHC(3) had restricted deduction under section 80HHC, Assessing Officer was justified in initiating reassessment proceedings on said basis -
[2012] 20 taxmann 47 (Delhi - Trib.)

2. Transfer Pricing - Where royalty was paid in a continuous and phased manner and there was no comparable and no finding about ordinary profits, there would not be application of ALP - [2012] 20 taxmann.com 44 (Ahmedabad - Trib.)

3. Arbitrary valuation of closing stock-in-trade, disregarding recognised practice of valuation either at cost or market price, whichever is lower, deserved to be rejected, even if same was being adopted uniformally year after year - [2012] 20 taxmann 42 (Chandigarh - Trib.)

4. Amount of notice pay received by assessee from its employees working in software units was to be treated as income derived from its eligible business of export software and, thus, deduction under section 10A was to allowed on said income - [2012] 20 taxmann 43 (Delhi - Trib.)

5. Where a member of Dispute Resolution Panel (DRP) is jurisdictional Commissioner of assessee, constitution of DRP is contrary to principle of natural justice - [2012] 20 taxmann 185 (Mumbai - Trib.)

 
 

13 Apr, 2012


INCOME TAX

1.Royalty paid by assessee in order to acquire right to use technical information and trademark for manufacture and sale of fabrics, is to be allowed as business expenditure - [2012] 20 taxmann 22 (Mumbai - Trib.)

2. Transfer Pricing - Profit Level Indicators (PLIs) are ratios that measure relationship between profits and costs or resources

• PLI represents a logical financial relationship between two components/variables

• Use of a particular PLI depends on a number of factors including, nature of activities of tested party, reliability of available data with respect to uncontrolled comparables and extent of which PLI is likely to produce available measure of income

• PLI is selected with its appropriateness for transaction under view - [2012] 20 taxmann 39 (Delhi - Trib.)
 


 
 

13 Apr, 2012


SERVICE TAX

1. Once existence of conditions specified by any one of clauses barring jurisdiction of AAR is established, it is bound to reject application, it is not open to AAR to ignore legal bar

• Where questions sought to be raised are pending before Cestat, though at instance of applicant\'s holding company, AAR should exercise its discretion not to allow application under section 96D(2) of Finance Act, 1994 for purpose of giving a ruling under section 96D(4) - [2012] 20 taxmann 30 (AAR CEC&ST - NEW DELHI)

2. Movement of excavated iron within mining area from one place to another cannot be called \'as cargo handling service\' -
[2012] 20 taxmann 187 (New Delhi - CESTAT)

3. Where Commissioner (Appeals) after a detailed examination of assessee\'s activity held same to be falling under clearing and forwarding agents service, said order was to be confirmed - [2012] 20 taxmann 189 (New Delhi - CESTAT)

4. Where assessee was providing different types of services on which service tax made applicable on different dates and on being information sought by department assessee took registration and paid service tax, in absence of any questionable conduct of assessee, no penalty was to be imposed on assessee - [2012] 20 taxmann 134 (New Delhi - CESTAT)

 
 

12 Apr, 2012


Now, prosecution of tax evaders made easier

Retrospective amendments to handle cases akin to the Vodafone deal and provisions to tackle black money as proposed in the Budget may have received huge attention, but that isn’t all about it. A ‘silent amendment’ to the Income Tax Act related to prosecution powers is being seen as a crucial change. This would allow officials involved in an investigation to take a quick call on initiating prosecution in tax-evasion cases. A senior finance ministry official said on Tuesday the proposed change in the Finance Bill, 2012, would broaden the definition of commissioner. It would now include the director, thus allowing a director of investigation and also director of criminal investigation to sanction prosecution, he told Business Standard.

 
 

12 Apr, 2012


E-filing of return must for over Rs 10 lakh income

It is now mandatory for individuals with income of over Rs 10 lakh to file their tax returns for 2011-12 electronically.“e-filing has been made compulsory for the person who is an individual or a Hindu Undivided Family, if his or its total income, or the total income in respect of which he is or it is assessable under the Act during the previous year, exceeds Rs 10 lakh for assessment year 2012-13 onwards,” the I-T Department said.

 
 

12 Apr, 2012


Circular No. 156/7 /2012-ST

Circular No. 156/7 /2012-ST

F.No.354/66/2011-TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

(Tax Research Unit)

153, North Block,                           

                     New Delhi, 9th April, 2012

To

Chief Commissioner of Customs/ Customs and Central Excise/ Central Excise & Service Tax (All), Director General of Service Tax /Central Excise Intelligence /Audit, Commissioner of Customs, Commissioner of Customs/Customs and Central Excise/ Central Excise and Service Tax/ Service Tax (All)

 

Madam/Sir,

Subject:   Service tax paid on taxable services used for export of goods at the post-manufacture stage — electronic refund through the Indian Customs EDI System -- Notification 52/2011-ST – review -- regarding.

 

  A Committee has been constituted with Director General of Service Tax,  Smt. Sanghamitra Panda as Chairperson, to review the scheme for electronic refund of service tax paid on taxable services used for export of goods, made operational vide Notification 52/2011-ST dated 30th December, 2011.  Other members of the Committee are Commissioner of Service Tax, Mumbai-1, Shri. Sushil Solanki and Director, TRU, Shri. J. M. Kennedy.

2.          The Committee has been instructed, as a part of the review, to (a) evolve a scientific approach for the fixation of rates in the schedule of rates for service tax refund; and (b) propose a revised schedule of rates for service tax refund, taking into account the revision of rate of service tax from 10% to 12% and also movement towards ‘Negative List’ approach to taxation of services. The Committee may interact with/call for data from, the field formations, export promotion councils, chambers of commerce or any other business or industry association, as may be required. The Committee will submit its report to the Chairman, CBEC, before 20/06/2012. Views and suggestions may be posted at the e-mail address: feedbackonestr@gmail.com

3.          This Circular may be communicated to the field formations, exporters, chambers of commerce, export promotion councils, through Public Notice/Trade Notice. Hindi version to follow.                                                                                                       

(Samar Nanda)

Under Secretary, TRU

Tel/Fax: 011-23092037

 

 
 

12 Apr, 2012


Circular No.155/6/ 2012 – ST

Circular No.155/6/ 2012 – ST

 

F. No 334/1/2012- TRU

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Tax Research Unit

 

Room No 146, North Block, New Delhi

Dated: 9th April 2012

To

Chief Commissioner of Customs and Central Excise (All)

Chief Commissioner of Central Excise & Service Tax (All)

Director General of Service Tax

Director General of Central Excise Intelligence

Director General of Audit

Commissioner of Customs and Central Excise (All)

Commissioner of Central Excise and Service Tax (All)

Commissioner of Service Tax (All)

 

Madam/Sir,

 

Subject: - Clarification on Point of Taxation Rules - regarding.

 

 

1.           Notification No. 2/2012 - Service Tax dated the 17th March 2012 has rescinded Notification No.   No. 8/2009 – Service Tax, dated the 24th February, 2009, thus restoring the effective rate of service tax to 12% wef 1st April 2012. Further the Notification No. 26/2010-Service Tax, dated the 22nd June, 2010 has been superseded by Notification No. 6/2012 - Service Tax dated the 17th March, 2012, wef 1st April 2012.

2.           It has been brought to the attention of the Board that some airlines are collecting differential service tax on tickets issued before 1st April 2012 for journey after 1st April 2012, causing inconvenience to passengers. Representations have also been received in this regard. The position of law in the above respect is clear and is detailed below.

3.           Rule 4 of the Point of Taxation Rules 2011 deals with the situations of change in effective rate of tax. In case of airline industry, the ticket so issued in any form is recognised as an invoice by virtue of proviso to Rule 4A of Service Tax Rules 1994. Usually in case of online ticketing and counter sales by the airlines, the payment for the ticket is received before the issuance of the ticket. Rule 4(b)(ii) of the Point of Taxation Rules 2011 addresses such situations and accordingly the point of taxation shall be the date of receipt of payment or date of issuance of invoice, whichever is earlier. Thus the service tax shall be charged @10% subject to applicable exemptions plus cesses in case of tickets issued before 1st April 2012 when the payment is received before 1st April 2012.

4.           In case of sales through agents (IATA or otherwise including online sales and sales through GSA) the payment is received by the agent and remitted to airlines after some time.  When the relationship between the airlines and such agents is that of principal and agent in terms of the Indian Contract Act 1872, the payment to the agent is considered as payment to the principal. Accordingly as per Rule 4(b)(ii), the point of taxation shall be the date of receipt of payment or date of issuance of invoice, whichever is earlier. Thus the service tax shall be charged @10% subject to applicable exemptions plus cesses in case of tickets issued before 1st April 2012 when the payment is received before 1st April 2012 by the agent.

5.           However, to the extent airlines have already collected extra amount as service tax and do not refund the same to the customers, such amount will be required to be paid to the credit of the Central Government under Section 73A of the Finance Act 1994 (as amended).

6.           Trade Notice/Public Notice may be issued to the field formations accordingly.

7.     Please acknowledge the receipt of this circular. Hindi version to follow.

 

(Shobhit Jain)

OSD, TRU

Fax: 011-23092037

--X—0—X--

 
 

10 Apr, 2012


Government sets up study group on CTC for common service tax, excise duty

The Finance Ministry today set up a study group to look into the possibility of a Common Tax Code (CTC) for service tax and central excise duty."A Study Team has been set-up by the Government, under the leadership of M K Gupta to examine the possibility of a common tax code for service tax and central excise, which could be adopted to harmonize the two legislations," a finance ministry statement said. The study group would submit its report to the Finance Minister by September 30, 2012. The government is in the process of coming out with a Direct Taxes Code ( DTC) with a view to replace the archaic Income Tax Act. The study group would look at procedural simplification of the existing input tax credit scheme and suggest ways to mitigate cascading effect of taxes. It will also endeavour to make the CTC trade-friendly.

 
 

10 Apr, 2012


Anti-dumping duty on Japanese, Chinese printing plates likely

ndia is likely to impose anti-dumping duty of up to USD 6.60 per sqm on import of particular types of digital printing plates from China and Japan to protect domestic players from cheap imports.In preliminary findings, the Directorate General of Anti-dumping and Allied Duties (DGAD) has concluded that the domestic industry has "suffered material injury" due to the "dumped" imports of the Digital Offset Printing Plates from China and Japan.The plates are used in the printing industry for transferring data on tin sheets. It enables direct transfer of image from a computer to the plate. The restrictive duty recommended by the DGAD on different types of plates will vary from USD 5.26 per square meter to USD 6.60 per sqm.The product has been exported to India from China and Japan below normal values, the commerce ministry has said in a notification.

 
 

10 Apr, 2012


E-filing taxpayers won\'t have to acquire a digital signature

The income tax department is set to introduce a free-of-cost and easy-to-operate electronic signature facility to file income tax returns electronically.The facility will help taxpayers who do not have a digital signature. It will save them from the mandatory requirement of sending a hard copy of the return filed electronically through speed post to the department’s central processing centre in Bangalore. Acquiring an electronic signature will not involve any cost for the taxpayer, as it will be provided by the department. Currently, only those having digital signatures acquired through specified vendors by paying the required charges need not send the hard copy of the return to the department after filing electronically.

 
 

10 Apr, 2012


RELEVANT TAX CASES INCOME TAX

1. In XYZ Ltd., In re [2012] 19 taxmann.com 231 (AAR - New Delhi), it was held that Inspection, Verification and Testing (IVTC) services are FTS within meaning of section 9(1)(vii) and taxable in hands of a non-resident of a country with whom India does not have a DTAA

• However, where non-resident is a resident of a country with whom India has a DTAA which contains a \'make available\' clause, such payments would not be taxable in hands of non-resident as:

(i) In Perfetti Van Melle Holding B.V (AAR 869 of 2010), AAR ruled that expression "make available" would mean that recipient of service should be in a position to derive an enduring benefit and be in a position to utilize knowledge or know-how in future on its own

(ii) However, there is no \'make available\' element in IVTC as utility of services comes to an end, little thereafter, if not immediately, after its rendition; elements of \'make available\' is absent as even for said reports, customers have to continuously refer to applicants and same is not freely made available to customers - [2012] 20 taxmann 88 (AAR - New Delhi)

2. In sphere of international taxation, there are two fundamental systems of taxation, one is based on residency of taxpayer and other is based on source of income

• In residency based taxation system whereby a country can tax its residents on global income of taxpayer while non-residents are taxed only on income sourced inside country

• Provisions of section 5 of Income-tax Act, 1961 give a scope of a total income of assessee who is resident of India; as per these provisions, scope of total income in case of a resident also extended to income accrues or arises to him outside India during such year

• Under source based system, a country can tax a person whether resident or non-resident, only on income sourced inside country

• Had all countries in world following source based taxation system then problem of double taxation would not have arisen; however, under resident based system, there arises a situation of double taxation because countries where taxpayer is a resident then it will have to pay tax on its global income

• To avoid double taxation, two rules are devised in DTAA\'s, i.e., one is by way of providing Distributive Rules under which taxing rights allocated between contracting state with respect to various kinds of income; and second rule is to put state of residence under an obligation to give either credit for taxes paid in source state or to exempt income which is taxed in source state

• Taxation law in India follows credit method for relieving burden of double taxation

• Under Distributive Rules, taxing rights are distributed between contracting states; exclusive rights to taxation in respect of certain incomes are given to one state and thus other state is precluded from taxing those incomes and therefore, double taxation is avoided; as a rule, such exclusive rights are given to state of residence; in respect of other types of income, right to tax is not exclusive one; other state may also tax that income and depending upon taxing rights of source state

• Distributive Rules uses word "shall be taxed only", "may be taxed" and "may also be taxed"

• Thus, if a contracting state is to give exclusive right to tax a particular kind of an income, then relevant article of convention uses phrase "shall be taxed only"; as a rule, such exclusive right is given to state of residence, though there are a few articles where exclusive right to tax is given to state of source; phrase "shall be taxed only" precludes other contracting state from taxing that income

• In cases, where distribution of right to tax is not exclusive, convention uses phrase "may be taxed"; in such Model of Convention, use of phrase "may be taxed" does not give exclusive right of taxation to state of residence; as per these Model of Convention, word "may be taxed" and "may also be taxed" gives simultaneous taxing rights to state of source

• If, in DTAA, an item of income is "may be taxed" in state of source and nothing is mentioned about taxing right of state of residence in convention itself, then state of residence is not precluded from taxing such income and can tax such income using inherent right of state of residence to tax such global income of its resident

• Only in case of phrase "shall be taxed only" used, then only state of residence is precluded from taxing it; in such cases, where phrase "may be taxed" used, state of residence has been given its inherent right to tax - [2012] 20 taxmann 31 (Delhi - Trib.)

 
 

06 Apr, 2012


Govt to tighten customs laws to check duty evasion

In order to check duty evasion, the government has proposed to tighten the customs laws by making violation of certain provisions as cognizable offences, meaning that the offender will have to approach a court or magistrate to seek bail.For offences which are punishable with imprisonment for 3 years or more under the Customs Act, the person will have to move the court or magistrate for bail, as per the Budget proposal. This amended provisions in the Customs Act will come into effect if the market value of the goods on which duties have been evaded exceed Rs 1 crore, duty evasion of over Rs 30 lakh or there is an attempt to import prohibited goods.

 
 

06 Apr, 2012


Record income tax collection in northwest region

The Northwest region of Income Tax Department has made a record tax collection. Around Rs 5,188 crore have been collected in the region which includes Chandigarh, Punjab, Haryana, Himachal Pradesh and Jammu & Kashmir.According to Jaspal Singh, Chandigarh Income Tax Chief Commissioner, this year’s tax collection is 44.13% times higher than previous year’s total tax collection which was Rs 4,532 crore. A collection of Rs 2335 crore was made from Ludhiana Income Tax Chief Commissioner’s region; whereas from Amritsar region Rs 1,963 crore; Rs 10,801 crore from Panchkula region; Rs 486 crore from Shimla region; The total budget collection during 2011-12 is around RS 21,027 crore.

 
 

06 Apr, 2012


RELEVANT TAX CASES INCOME TAX

1. PE in India and GE (General Enterprise)/HO abroad of which said PE is part are not independent persons under domestic law i.e. Income-tax Act and they are not assessed to tax separately in India; taxable entity is only one i.e. overseas GE which is assessee-bank in present case who is a non-resident in India and PE in India is part of that entity which is a taxable entity in India in respect of income attributable to PE in India

• PE is not an independent person who is assessed to tax separately in India; it is a part of GE and its income is chargeable to tax in hands of GE which alone is person assessable to tax in India

• Settled position under domestic law is clear that one cannot make profit out of himself and if payment of interest made by Indian PE to foreign GE of which it is a part would be payment to self, it cannot give rise to any income which is chargeable to tax in India as per domestic law

• Profits attributed to PE are profits which it might be expected to make if it were a distinct and separate enterprise engaged in same or similar activities under same or similar condition and dealing wholly independently with enterprise of which it is a PE; said fiction is applicable only for purpose of determining profits attributable to PE and this limited application contemplated in DTAA cannot be extended and applied to compute income of GE

• Relationship between a PE and enterprise of which it is a part, a comparison is often made to a Yolk in egg; PE is considered as yolk and enterprise as a whole is considered as egg; this comparison is made to show that whatever is in yolk is necessarily in egg itself and there is no need to account for egg separately; on other hand, not everything that is in egg is part of yolk and it is, therefore, not necessary to account for yolk separately in cases where resident State avoids total taxation using credit method or tax exemption method

• Separate and independent enterprise fiction does not extend to article 11 and for purpose of that article, one part of an enterprise cannot be considered to have made an interest payment to another part of same enterprise - [2012] 19 taxmann 364 (Mumbai - Trib.)(SB)


2. Assessee, engaged in power generation, claimed depreciation on a newly installed windmill on basis of WDV method at rate of 15%; subsequently, when assessee realised mistake that correct rate of depreciation would be 80%, it filed a letter before Assessing Officer to rectify claim and to provide depreciation at rate of 80%; Assessing Officer rejected claim considering principle laid down by Supreme Court in Goetze (India) Ltd. v. CIT [2006] 157 Taxman 1 that a fresh claim cannot be made by assessee other than by filing a revised return

• Tribunal held that assessee was not making a fresh claim before Assessing Authority; Infact, assessee had made a claim for depreciation but rate choosen was not a correct one; thus, judgment of Supreme Court in Goetze (India) Ltd. (supra) would not apply to present case; further, as per Explanation 5 to section 32(1), depreciation would be allowed whether or not assessee has claimed depreciation in computing total income; therefore, assessing officer was duty bound to allow depreciation computed at correct rate provided under Act - [2012] 19 taxmann 313 (Chennai - Trib.)

2. Merely if an issue is pending consideration before Commissioner (Appeals), Commissioner\'s jurisdiction under section 263 does not get curtailed qua assessment order - [2012] 19 taxmann 277 (Kolkata - Trib.)

3. The expression \'housing project\' is neither defined under section 2 of the Act nor under section 80-IB(10); therefore, expression \'housing project\' in section 80-IB(10) would have to be construed as commonly understood; expression \'housing project\' in common parlance would mean constructing a building or group of buildings consisting of several residential units; in fact, Explanation in section 80-IB(10) supports contention of assessee that approval granted to a building plan constitutes approval granted to a housing project; therefore, it is clear that construction of even one building with several residential units of size not exceeding 1000 square feet would constitute a \'housing project\' under section 80-IB(10)

• To avail deduction under section 80-IB(10), it is not necessary that housing project must be on size of a vacant plot of land which has minimum area of one acre; section 80-IB(10)(b) specifies size of plot of land but not size of housing project; size of plot of land, as per section 80-IB(10) must have minimum area of one acre; section does not lay down that plot having minimum area of one acre must be a vacant plot; if construction of section 80-IB(10) putforth by Revenue is accepted, it would mean that if on a vacant plot of land, one housing project fulfilling all conditions is undertaken, then deduction would be available to that housing project and if thereafter several other housing projects are undertaken on very same plot of land, deduction would not be available to those housing projects as plot ceases to be a vacant plot after construction of first housing project; such a construction if accepted would defeat object with which section 80-IB(10) was enacted(to make available large number of medium size residential units for benefit of common man); moreover, plain reading of section 80-IB(10) does not even remotely suggest that plot of land having minimum area of one acre must be vacant - [2012] 19 taxmann 316 (Bombay)


1. Only a genuine buyback is excluded from definition of \'dividend\' by section 2(22)(iv) and exempt from DDT under section 115-O; a colourable buyback of will attract DDT

• Buyback held to be a colourable device for tax avoidance to distribute dividends in guise of buyback to avoid payment of DDT in view of following facts

(i) 98.24% of applicant-company\'s shares held by three overseas companies of "A" group-A(USA),A(Mauritius) and A(Singapore) and only 1.76% were held by general public

(ii) Dividends were regularly paid by applicant-company prior to introduction of DDT; no dividend paid by application company after introduction of DDT

(iii) Instead of distributing dividend regularly which would have entailed payment of DDT, applicant allowed reserves to accumulate from Rs.1crore(March 2003) to Rs.4 Crores (March2010) and proposed a buyback offer by Board of Directors passing a resolution under section 77A of Companies Act,1956 on 15.6.2010

(iv) Applicant had announced a buyback in 2008 also which was accepted only by A(Mauritius) as under DTAC with Mauritius, capital gains is totally not taxable in India; A(USA) and A(Singapore) did not accept buyback offer obviously because amount received by them under buyback would have been taxable as capital gains in India; it was not known whether anyone from general public accepted offer; it was expected that same would be case with proposed 2010 buyback as well

• In view of finding that proposed buy-back is a colourable transaction, receipt of buyback consideration by A(Mauritius) will satisfy definition of dividend under Act and consequently attract tax in India as such - [2012] 20 taxmann 52 (AAR - New Delhi)


2.
Where property in question leased out to a bank was owned by various co-owners and each owner was having a definite and ascertainable share in property, threshold limit for purpose of deduction of tax at source under section 194-I would apply to each of co-owners separately - [2012] 20 taxmann 40 (Allahabad)

1. Where usance interest was not included into price of raw materials which was reflected in a separate invoice and usance interest, for 180 days credit period from bill of lading extended to irrevocable LC, reflected in a separate invoice, it was clear that:

(i) there was no nexus between interest amount and fixation of price of raw materials purchased; and

(ii) nexus of interest was only with period from which purchase price of raw material became due

So, it could not be contended that outstanding price was not a \'debt incurred\' within meaning of section 2(28A)( which defines \'interest\')

• Since usance interest is interest as defined in section 2(28A), it will be deemed to accrue or arise in India under section 9(1)(v) - [2012] 19 taxmann 315 (Mumbai - Trib.)


2. Six categories of intangible assets enumerated in clause (b) of Explanation 3 to section 32(1)(ii), viz., knowhow, patents, copyrights, trademarks, licenses and franchises, are not of same kind and are clearly distinct from one another; therefore, expression \'any other business or commercial rights of similar nature\' cannot be understood ejusdem generis six types of intangibles enumerated

• Nature of \'business or commercial rights\' can be of same genus in which all aforesaid six assets fall; all above fall in genus of intangible assets that form part of tool of trade of an assessee facilitating smooth carrying on of business

• Intangible assets, viz., business claims; business information; business records; contracts; employees; and knowhow acquired by assessee under slump sale agreement are \'business or commercial rights of similar nature\' entitled to depreciation under section 32 - [2012] 20 taxmann 29 (Delhi)

 
 

05 Apr, 2012


Heavy petrol sale in Goa after reduction in VAT

Slashing of petrol prices in Goa has resulted in massive boost in sales at fuel outlets in the state, officials have said. Various petrol pumps have registered almost two-fold increase in sales in the last two days. The State\'s new BJP-led Government has reduced VAT (value-added tax) on petrol from 20% to mere 0.1%. The decision, announced in the budget presented last month by Chief Minister Manohar Parrikar, has come into effect from yesterday. The reduction has resulted in heavy rush at fuel stations in the tourist state. Government officials said Goa recorded an average daily sale of petrol worth Rs 2.3 crore before the new rate came into effect. Now the sales have touched Rs 3.5 crore-mark a day. Commercial Taxes Department officials said annual compounded growth of 25% had been earlier projected from VAT collection from petrol.

 
 

05 Apr, 2012


Government may cut excise on petrol to avert price hike

The finance ministry has indicated to oil companies that it may reduce the excise duty on petrol to lower their under-recovery burden, a move that is expected to help consumers do without an additional burden. Sources said the ministry was "actively considering" a proposal from the oil ministry to reduce duty. At present, the government levies excise duty of Rs 14.45 for every litre of petrol and oil companies are losing over Rs 9 a litre by selling the auto fuel below the international price. Last time the government had lowered excise duty on petrol in 2008 when the international crude price had touched $135. The reduction in duty then was by Re 1 a litre. However, this was restored in 2010-11 Budget. A reduction of Re 1 will help oil companies recover Rs 8,000 crore of under-recoveries. By agreeing to lower the excise duty, the finance ministry will at the start of the year itself see a dent in its revenue target, although it can still meet it through buoyancy later in the year.

 
 

05 Apr, 2012


DIRECT TAXES

High-income individuals, HUFs also under mandatory digital return regime
Vide notification 14 of 2012 dated March 28 2012, the CBDT has brought new categories of taxpayers under the mandatory digital return regime.For the upcoming assessment year 2012-13 and later, individuals and Hindu Undivided Families (HUFs) having total income in excess of Rs 10 lakh will have to compulsorily file income-tax return electronically.The Budget 2012-13 had proposed mandatory filing of income tax return by resident individuals and HUFs having assets abroad including financial interest in any entity abroad or whose signing authorities in respect of foreign bank accounts were residing abroad even if they did not have any taxable income during the relevant previous year.The notification, taking forward the object of the Budget move, mandates that these persons too come under the mandatory digital return regime. Digital returns lend themselves to special and pointed scrutiny.